Since Q3 of last year, office leasing has plummeted 77.7%, according to a report released by Colliers in late October. This means tenants have the upper hand in negotiations and can push for perks like free parking or generous improvement allowances. While the commercial office sector is taking a hit, multifamily is faring a bit better. The number of multifamily permits issued has dropped 25% since last year, but popular areas like The Woodlands still have a lot of properties under construction. Rents in the metro area have risen 6.3% in the last year to $1,007 a month, breaking the $1k barrier for the first time, according to Marcus & Millichap.
While the unsustainable development pace Houston maintained for the past several years is over, there are still some opportunities in the pipeline. Several large office buildings are in design or under construction, but the majority are pre-leased. One market sector enjoying an uptick is the industrial market. There is 9.6M SF of industrial space being built in Houston, a third of which is spec, as noted in Colliers’ Q3 analysis. Another bit of good news: Many investors are in it for the long haul in Houston. Wilson Cribbs & Goren partner Reid Wilson (pictured above on the left) told Law360 that private and foreign investors who are able to take on more risk continue to hunt for top-quality assets in the Houston area.
)
)
)
)
)
)
)
)
)
)
)
)