Despite Oil Woes, Houston Office Numbers Aren’t Terrible

Though the Houston metro office market continues struggling due to volatility in the oil markets, the numbers aren’t as bad as they could be. According to Colliers International’s Q1 2016 Houston Office Research & Forecast Report, the vacancy rate of 15.3% remained unchanged, quarter over quarter.

The annual vacancy rate tells another story, however, increasing 220 basis points (bps) from 13.1% in Q1 201. This was due to sublease space flooding the market. And the construction pipeline is shrinking. For example, the 1.4 million square feet of new inventory delivered during Q1 was 100% pre-leased.

Finally, absorption rate remains in positive territory at 1.2 million square feet. This was three times as much as the 400,000 square feet absorbed in the previous quarter.