Houston Sublease Space Steadily Declining, Now Below 9M SF

Empty Office

Though there may be no quick fix to Houston's glut of sublease space, the number does continue to steadily decline. A Q4 report from NAI Partners shows sublease space as a percentage of the total amount of available space decreased to 15.4%, or 8.9M SF.

Class-A sublease space represents 78% of the total, focused primarily in the central business district (23%), the Energy Corridor (21%) and Westchase (16%). The abundance of sublease space will take time to be absorbed, with a steady albeit slow pace throughout 2018, according to NAI Partners' Leta Wauson.

The sublease deals that are getting done have been small. A 19K SF sublease was signed in CityCentre Four. Another 11K SF of sublease space was taken off the market in Courtlandt Square in Midtown. Rockcliff Energy took 9,400 SF off the market on the 15th floor of 1301 McKinney.

The leases are having to keep pace with the supply being added to the market. Hess Corp. added 123K SF at 1501 McKinney while EP Energy added nearly 32K SF at 1001 Louisiana.

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