Is Houston's Office Market In Meltdown? This Expert Thinks So
Office leasing activity fell 25% in Houston during Q1 to levels worse than those experienced during the financial crisis.
The market is down 59% from Q4 2014, back when the oil collapse was just considered a blip and hadn't yet impacted the office market, Wolf Street reports. Also bad news: the availability rate jumped 4% from a year ago to 24.5% for Greater Houston.
Companies in this oil town are frantically trying to dump empty office space, but most of the time they can’t get out of their leases. So, they’re putting huge office buildings and warehouses up on the sublease market—in Q1 sublease space soared 19%, and it’s exploded 124% since Q3 2014.
And don’t think this meltdown will stay confined to the oil industry—the banks, bondholders and REITs that support these office markets are only one layer removed. [WolfStreet]