Market still favors tenants amidst uptick in leasing activity
The pace of demand in Houston is on the rise with the market seeing 3.8 million square feet (msf) of leasing activity in the third quarter, up 10.9% quarter over quarter. The West Loop/Galleria submarket saw the most activity with 843,542 square feet (sf) leased - 77.2% of which was in Class A product. The Katy Freeway/ Energy Corridor submarket followed close behind (623,904 sf). However, activity within the Central Business District (CBD) submarket saw a sharp decline year over year, dropping to just 362,808 sf leased compared to 1.2 msf in Q3 2018. Stronger activity pushed availability rates down, with overall availability declining 40 basis points over the year to 26.2%. Class A availability followed a similar trend, dropping 70 basis points in the past 12 months to 27.6%. Still, availability in most submarkets hovers above 25.0%, providing plentiful options – and leverage – for tenants.