July 24, 2019
Metrics released for Houston’s office market from Q2 2019 showed more or less the same thing. Namely, negative absorption amid a higher vacancy rate. The CRE companies releasing the information pointed to several reasons for the second-quarter figures.
NAI Partners pointed out that the 647,000 square feet of vacant space delivered to the market this past spring had a huge impact on absorption and vacancy. In addition, “the prior onrush of companies leasing office space has reached a turtle’s pace,” said NAI Partner’s Taylor Wright. CBRE pointed to move-outs as a cause, namely, the departure of IHS Cera, Smith Barney, Philip Services, among others, from the West Loop/Galleria submarket.
Colliers, in the meantime, pointed to “the newest trend of vacating older spaces for modern/creative efficient interior designs . . .” has meant that tenants are leasing less space without reducing head count. Meanwhile, JLL likened the activity to musical chairs “. . . as new leases and tenant relocations outpace known renewals . . . by a ratio of at least 4:1.”
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