Houston Office Market
Average annual full-service asking rental rates fell to $28.67/SF, reflecting a 2.5% decrease year over year. Direct rates dropped to $28.84/SF while sublease rents decreased to $22.88/SF, resulting in a narrowing rent spread of $5.96/SF. Overall vacancy rates remained at a peak of 25.9% in the first quarter of 2025, unchanged from the prior quarter and increasing by 40 basis points year over year. The first quarter of 2025 closed with positive absorption of 123,831 SF, as occupancies steadied and new supply modestly outpaced demand. Total leasing activity closed the quarter at 2.1 MSF, well below the long-term first-quarter average of 4.4 MSF. The average lease size was 3,340 SF, decreasing 27.0% quarter over quarter and 16.1% year over year.
Download Houston Office Market Report 1Q25Houston Industrial Market
The market realized 2.9 MSF of positive absorption in the fourth quarter of 2024, a decrease of 63.0% quarter over but continued to outpace deliveries. Overall rental rates grew 2.9% year over year to $9.50/SF, reaching a new all-time high for the third consecutive quarter. Construction deliveries fell to 2.4 SF in the fourth quarter of 2024, while the pipeline declined to 13.5 MSF under construction. Absorption narrowly outpaced deliveries, helping vacancy rates to contract by 10 basis points both quarter over quarter and year over year to 6.7%.
Download Houston Industrial Market Report 4Q24