Houston Office Activity Slowly Rebounding

Office market fundamentals are slowly improving as the top end of the market continues to lead in the recovery, that’s according to Avison Young’s Second Quarter 2024 Office Market Report for Houston. The trophy office segment has been performing well, with 778,000 square feet (sf) of positive absorption recorded during the first half of 2024, demonstrating strong demand for high-quality space, with tenants prioritizing modern amenities and functionality.

Leasing activity in the second quarter of 2024 totaled 2.7 million sf, which remains 36% below the 5-year pre-Covid leasing average. The slower pace in leasing activity has likely been impacted by a more challenging debt and liquidity environment for building owners, preventing larger deals from occurring as easily with their lenders, and the use of hybrid and remote work. 

Finally, the report shows that energy-related firms continue to dominate leasing activity, accounting for 30.6% of the leasing activity to date.