Understanding an office market as large as Houston's is no easy task. Nearly 200M SF is spread out over a variety of submarkets that can perform very differently from each other. A relative analysis can reveal pockets of strength, weakness, momentum and cyclicality.
This simple chart lays out many storylines from Houston's office market over the last decade.
Houston features many employment-centric submarkets that always have lower vacancy than the average. Examples include CBD, Galleria/Uptown, Greenway and The Woodlands.
Galleria/Uptown is a rock star with vacancy rates consistently on the low end.
Bellaire/Medical District is a standout. With its reliance on the medical field, the area tends to move counter-cyclical to the rest of the local economy.
CBD is steady as she goes. The largest employment center in Houston is synonymous with consistency. The area is vulnerable to supply shocks though, as seen by the sharp drop following the Great Recession.
The Energy Corridor is extremely reactive to the price of oil. The area's relative vacancy rate follows the percent change in crude oil prices very closely.
Special thanks to David Wegman at NGKF for creating the chart.
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