Houston office market overview: Commercial Gateway

HOUSTON – Commercial Gateway, the Commercial Division of the Houston Association of Realtors, has released its third quarter market overview for Houston’s office market.

Houston’s office market ended 3Q 2012 with a total of 437,315 sf of positive net absorption, less than each of the previous two quarters, but year-to-date surpasses absorption for all of 2011. Class A space is on top again this quarter, with 438,227 sf recorded for the quarter and 1.6 million sf year to date, accounting for 64.3 percent of the year’s total absorption.

Currently, 18 office properties totaling almost 4.3 million sf are under construction, with Energy Tower III topping the list as the largest project, 450,532 sf, with no preleasing.

Numerous other projects have announced start dates during 4Q, including the largest project, a 660,000-sf, three-building project by Transwestern.

The current 12.1 percent vacancy rate is an improvement over the 13.8 percent vacancy recorded during the same quarter a year ago.

Average weighted rental rates appear stable overall, but rates have inched up during the last three quarters to stabilize at $22.92 per sf this quarter.