January 10, 2017
Through all of 2015 and much of 2016, subleased office space in Houston was on the rise, playing havoc with absorption figures and pushing up overall vacancies. But a glimmer of good news occurred during the final quarter of 2016.
According to JLL’s “Office Insight” report on the Houston office market, subleased space dropped from the 12.4 million square feet reported in Q3 to 11.9 million square feet in Q4. CBRE’s “MarketView” reported a similar decline, from Q3’s 12.5 million square feet, to 11.1 million square feet by year-end. Meanwhile, CBRE reported vacancy at 15.7%, versus JLL’s 20.3%.
Both reports state that 2017 will likely be more of the same, with CBRE estimating such a recovery could take at least three years in the CBD and Energy corridor submarkets, “due to a larger-than-normal surplus of space, and slower-than-normal job rate.” Additionally, “given the slowdown in leasing demand, the total vacancy rate is anticipated to remain at elevated levels in 2017,” the JLL report noted.
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