Houston Among More Affordable Metros For Office Build-Outs
Aided by above-average tenant improvement allowances, Houston is among the most affordable markets in the U.S. and Canada for office users to build out space. A new report from JLL shows the average TI package for second-generation space in Houston is $60/SF, approximately 35% higher than the U.S. and Canada average of $44/SF.
High office vacancy is a force driving above-average TI packages in Houston, but the "flight to quality" theme playing out in Houston and across U.S. markets has a role as well. Landlords of older buildings are increasingly offering lots of TI dollars to encourage tenants to update and build out spaces instead of moving to new supply.
Landlords of high-quality developments have been incentivizing tenants with large TI packages to help offset the higher budget that tends to come with building out an office in first-generation or cold shell space.