Sublease Office Leasing Activity Down Nearly 30% In Q2
Houston's office vacancy is about to take a hit as the sublease market dumps space through expirations.
Houston will return 43 full floors of sublease office space within the next 12 months as the term of several leases are set to expire, according to Colliers International data as reported by Realty News Report.
In response to the energy downturn, which led to many companies downsizing and closing office space, the Houston office market has been slow to rebound compared to other sectors. Sublet leasing activity decreased 28.4% over the quarter from 373K SF to 267K SF.
Sublease net absorption has rebounded from the net loss experienced in Q1. Net absorption for the quarter was positive, with 915K SF of space absorbed quarter to quarter. Sublease vacancy fell to 2.5% in Q2.
The majority of the sublease space available in Houston fell within the central business district and Katy Freeway submarkets, with nearly 5M SF available between the two. Westchase and Greenway Plaza submarkets trailed closely behind in terms of available space.
The biggest available block in the city was an 808K SF block at 5 Greenway Plaza vacated by Occidental Petroleum Corp. Other top availabilities include 479K SF at Four WestLake Park, 376K SF at Energy Tower II, 262K SF at NRG Tower, 246K SF at One Shell Plaza and 222K SF at Three WestLake Park.
Bisnow's Houston Workplace of the Future event Aug. 28 has a whole panel on leasing activity — don't miss it!