CBRE Houston: 2018 ends on an upward swing

​HOUSTON – Despite a positive fourth quarter net absorption, the metro finished 2018 with a net negative absorption of 1.1 million sf of office space, according to ​CBRE’s latest​​ quarterly office report​. ​

Over 1.3 million sf of sublease space expired and rolled vacant this year. The local office market vacancy rate has seen an increase of 130 bps from 17.3 percent in fourth quarter 2017 to 18.6 percent in fourth quarter 2018.

Sublease space converting to direct vacancy has put downward pressure on asking rates, which declined over the year from $29.41 to $29.00.​

Houston’s construction sector had a healthy fourth quarter delivering 704,800 sf of new office space. With deliveries totaling 1.2 million sf for the year and another 2.2 million sf under construction, tenants are continuing to show their preference for newly constructed Class A properties.