First Quarter: Houston Office Market Strong

Houston’s growing economy continued to boost the commercial real estate market with positive absorption and numerous projects under construction in both the office and industrial markets during the first three months of 2013, as stated by quarterly market research compiled by Commercial Gateway, the commercial division of the Houston Association of Realtors.

The city’s office market finished the first quarter with a total of 511,161 sq ft of positive net absorption, which marks the eighth consecutive quarter of positive absorption. Class A space is on top for 326,441 sf absorbed, trailed closely by Class B with 236,927 sf. Class C recorded a negative 52,207 sf, continuing its second quarter of negative absorption.

Three suburban submarkets recorded positive net absorption of more than 100,000 sq ft during the first quarter with the West submarket at 145,733 sq ft taking the lead. Uptown recorded 121,749 sq ft while the Energy Corridor completed the top three with 104,462 sq ft. The three submarkets account for 72.8% of the total absorption for the year. The Central Business District (CBD) submarket recorded a negative 94,995 sq ft of net absorption. No major new office buildings have been completed yet in 2013, although five buildings totaling 947,080 sq ft are scheduled for completion during the second quarter; all but one is 66% or more pre-leased.