Houston Office Market
Average annual full-service asking rental rates fell to $29.92/SF, reflecting a 1.9% decrease year over year from the all-time high of $30.50/SF reported in the fourth quarter of 2023. Overall vacancy rates rose to 25.2% in the fourth quarter of 2024, up 30 basis points quarter over quarter, and increasing by 60 basis points year over year. Positive absorption in the second and third quarters of 2024 could not counteract the strong negative absorption that started and ended the year. The fourth quarter of 2024 had negative absorption of 619,397 SF, pushing the annual absorption total to negative 663,806 SF. Total leasing activity closed the quarter at 3.0 MSF, well below the long-term fourth-quarter average of 4.5 MSF. The average lease size was 3,854 SF, an increase of 16.5% quarter over quarter and a decrease of 5.4% year over year. Deal volume is down 22.1% year over year as occupiers held out for a more favorable financing environment and awaited recent election results.
Download Houston Office Market Report 4Q24Houston 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