Tenants leased 3.6 million square feet (msf) in the fourth quarter, an increase from the 3.5 msf completed in the third quarter. Leasing during 2018 totaled 14.8 msf, well above the market’s long-term average.
The market’s overall availability rate dipped slightly from 26.82% to 26.52%. The Class A availability rate also decreased from 28.53% to 28.25%. Both rates are down slightly from a year ago.
ASKING RENT UP SLIGHTLY
Average asking rent for the Houston market increased by 1.2% to $28.80. The Class A rate rose by 1.8% to $33.27.
SUBLEASE SUPPLY REMAINS ELEVATED
Overall sublease supply remains substantial, totaling 8.2 msf as of early December, 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.
"Oil prices took a hit late in the year, due in large part to shaky equity markets and global uncertainty. Prices are forecasted to stabilize at just under $60 per barrel in 2019. Meanwhile, other major industries such as healthcare continue to expand."Brad Hauser, Research Director