Houston Landlords: 43 Full Floors of Sublease Office Space Returning in 12 Months
The 5 Greenway Plaza building has 806,000 SF of sublease space, more than any other building in Houston.
HOUSTON – (Realty News Report) – Over the next 12 months, owners of several Houston office buildings will regain 43 full floors of space as existing sublease agreements expire, according to a recent Colliers International report.
Citywide, Houston currently has the equivalent of 288 full floors available as sublease space. More than half of that inventory still carries five or more years remaining on the underlying lease terms, Colliers found.
There is just over 9 million square feet of sublease space in the market, driven largely by downsizing in the energy sector. The largest single block is Occidental Petroleum’s 806,000 square feet at 5 Greenway Plaza. Other major concentrations include BP’s approximately 479,000 square feet at Four WestLake Park and KTI/Technip’s roughly 376,000 square feet at Energy Tower II.
In downtown Houston, leasing activity has reduced the large Shell sublease at One Shell Plaza (910 Louisiana). After NRG took a substantial portion of that space, about 246,000 square feet of the Shell sublease remains available.
Several other properties each have around 200,000 square feet of sublease space. These include Three WestLake Park (formerly occupied by Phillips 66), 1100 Louisiana (Enbridge), 10777 Clay Road (AMEC Foster Wheeler), Energy Center I (Foster Wheeler), and Westway III (GE Oil & Gas).
Colliers notes the current sublease supply sits below 10 million square feet, down from its peak of 12 million square feet in the third quarter of 2016. Even with Occidental recently adding about 814,000 square feet across two Greenway Plaza buildings, the market has absorbed roughly 326,000 square feet of sublease inventory so far this year.
The largest concentrations of sublease availability are clustered in the Energy Corridor, Downtown and Westchase submarkets.
Although the Houston office market remains soft, other commercial real estate sectors are performing relatively well. Additionally, single-family home sales in June set a new monthly record for the Houston housing market.
