Houston Skyscrapers Rising Above Office Sector Struggles
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.
