JLL Report: 2.5 Million SF of Sublease Space Has Hit Houston Office Market Since Jan. 1, Market briefs

In Houston, JLL reports that 2.5 million sq ft of sublease space has come on the office market so far this year. About half of the sublease space is located in west Houston, where the Energy Corridor is located.

BP, StatOil, and ConocoPhillips have all placed large blocks of excess space onto the market, this year, JLL says. Other reports say Sasol and Worley Parsons are turning out big blocks for sublease.

A number of energy firms have reported layoffs and reduced capital expenditure budgets by billions as oil prices have declined. West Texas Intermediate has fallen from $108 a barrel last summer to less than $50 a barrel today.

In As stated by a Jll report counting full, floors of space put on the sublease market since Jan. 1, including some 883,000 sq ft of sublease has been offered in downtown Houston and 664,000 sq ft in the Energy Corridor/Katy Freeway.

Another report from CBRE says 5.3 million sq ft of sublease space is on the market. Houston leads the nation with 16.5 million sq ft of office space under construction and it is 65 percent pre-leased.

Last year was an outstanding year for the Houston office market, which racked up 5.5 million sq ft of absorption in 2014, CBRE said.

JLL Houston President Dan Bellow said in a recent speech that Houston has become a tenants market and rents are under downward pressure.

Other real estate firms have reported Houston’s first-quarter sublease surge to be 1 million sq ft.

JLL Houston’s research manager Graham Hildebrand said in a phone interview that the 2.5 million sq ft of sublease space does not come from any brand-new buildings.