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Houston Skyscrapers Rising Above Office Sector Struggles

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Downtown Houston Skyline
Downtown Houston skyline

Even in a downturn, there is always a market for quality. JLL’s 2017 Skyline report reveals that despite consolidations, space give-backs and record sublease levels, Houston's premier office buildings are still outperforming the market, capturing the lion’s share of leasing activity.

Houston’s eight trophy buildings attracted 64% of deals larger than 20K SF since 2016 despite comprising only 36% of the skyline inventory. New skyline buildings (those built since 2010) such as 811 Main, 609 Main and 800 Capitol have capitalized on tenant demand for prime space, capturing approximately 42% of skyline leasing activity in the last year. Skyline buildings command rents that are on average 28.8% higher than non-skyline Class-A rents in the CBD.

With well-capitalized owners and asking rents holding steady in Houston’s skyline, a significant gap between bid and asking prices stymied investment activity throughout 2016. This spread, however, is beginning to tighten and transactions are happening again in Houston.

JLL Houston Skyline
JLL Houston skyline
Related Topics: JLL, office leasing, Oil Downturn