Houston’s landlord’s market here to stay?

HOUSTON – Houston’s commercial real estate market continues to see increased demand for limited office space and rising rent, and will remain a landlord’s market for the foreseeable future, according to REIS Reports.

Of the 79 markets reviewed, Houston ranks No. 13 with a vacancy rate of 14.2 for third quarter 2013, tying with Buffalo and Philadelphia.

Although Houston’s vacancy rate saw no change from the previous quarter, the report shows a 0.6 percent increase in commercial rent rates to $21.48 per sf.

The Energy Corridor is expected to add 4.5 million sf by 2016. Most of the new projects going up are 50 percent preleased. In the Galleria area, new construction and tenant activity have been the order of the day for some time.

Burns & McDonnell is doubling its Galleria office space at its 15-story tower, 1700 W. Loop South, and Skanska USA Commercial Development just sold its recently completed tower at 3009 Post Oak Blvd. for $112 million. And BBVA Compass opened its 22-story office tower at 2200 Post Oak Blvd. in June.

In addition to commercial activity, plans are afoot to expand the Galleria Mall, to which the Simon Property Group plans to add an additional 100,000 sf of retail space.