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Houston Office Vacancies Rise on Negative Absorption
The exact numbers may vary, but second-quarter Houston office reports from NAI Partners, Madison Marquette and Colliers International are in general agreement: vacancies are rising, driven by negative absorption.
NAI Partners reports Q2 vacancies at 23.1% for Class A properties and 22.7% for Class B, with negative absorption of 852,000 square feet.
Madison Marquette’s measuring stick puts the market’s direct vacancy at 20.8%, a 30-year high, with 807,000 square feet of negative absorption.
By Colliers’ reckoning, net negative absorption of 513,316 square feet pushed vacancies up by 40 basis points to 20.5%. The report says leasing activity declined by 35% from Q1.
That being the case, Colliers’ Patrick Duffy notes, “As we begin the third quarter, we have seen an increase in activity from potential office users in pursuing new leases” following the initial shock and some “wait and see” delays.
Madison Marquette says the biggest potential impact on Houston offices will be “how businesses will respond to the massive natural experiment of working from home.”
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