LEASING PUSHES HIGHER
Tenants leased 3.5 million square feet (msf) in the third quarter, a slight increase from the 3.2 msf leased in the second quarter, and above the long-term average of 2.8 msf leased per quarter. Leasing activity in the four most recent quarters totaled 13.5 msf, exceeding the market’s long-term average of 11.5 msf.
The market’s overall and Class A availability rates both fell in the third quarter, dropping to 27.3% and 29.3%, respectively.
ASKING RENT STABLE
Average asking rent for the Houston market rose by 0.2% to $28.48. Year-onyear average asking rent was essentially unchanged. The Class A rate declined by 0.4% to $33.16 during the third quarter.
SUBLEASE SUPPLY REMAINS ELEVATED
Overall sublease supply remains substantial, totaling 8.5 msf as of early September but is down from the high mark of 11 msf. The addition of Occidental's Greenway campus pushed sublet supply up by over 800,000 sf.
"Tenants across a wide set of industries continue to carefully assess the ample array of options available to them in this market. Sublet supply pushed higher in the quarter, but with oil and gas prices rising steadily, there is a sense that the local economy has turned the corner. In turn, the recent flight to quality is likely to continue in the coming quarters."Brad Hauser, Research Director