The move toward remote work, a clear threat to office occupancy, seems to have lost the shine we felt in the early parts of the lockdowns. All of this bodes well for the office market in the mid-term. As the COVID slowdown subsides and the global economy slowly restarts, expectations are that GDP will continue to recover at a relatively high rate in the next several quarters and that employment will continue to improve. Given the bounce back in GDP (up 35%) and employment (unemployment fell to 7.9% nationally and low 7’s in Texas) during a still COVID restrained 3rd quarter, this strategy seems sound. The landlord’s theory seems to be “accelerate occupancy, but hold the line on the long-term rental income,” which has historically been a sound strategy during perceived short-term economic downturns. However, the concession packages became slightly more aggressive in the last quarter, especially free rent and tenant improvement allowances. Obviously, not a positive trend for the Houston office market.ĭespite the increase in vacancy, asking lease rates stayed steady. The net result was to drive the vacancy rate up to 21.3% of the inventory we track. Including the new product, vacancy, therefore, increased by 1.8 million square feet. In the 3rd quarter, Houston delivered 490,000 square feet of new product, pushing the year-to-date total of new inventory to 1.2 million square feet. discussing an increase in vacant space, including new space delivery. Negative absorption literally means that less office space was occupied vs. We track absorption as the change in physically occupied space between the current quarter and the previous quarter. After experiencing negative absorption of 1.14 million square feet in the 2nd quarter, the 3rd quarter followed posting 1.33 million in negative absorption. The Houston Office Market continued to contract during the third quarter as the COVID-driven, government-mandated lockdowns continued. Learn how you can leverage the altSpace program as a building owner in the Texas market.Commentary by Patrick Duffy, MCR | President | Houston In the Texas market Houston is right up there with Austin and Dallas in terms of the flexible office space. Some of the coastal cities such as New York, and San Francisco have exploded with supply. In terms of size Houston has been lagging behind some of the larger markets for flexible office space. Houston is the perfect city to benefit from this program as there is over 7 million square feet of current sublease space on the market looking for tenants, as the primary lease holder has downsized staff or already found a different space. The altSpace product alters existing space into coworking space. The altSpace service layer provides design consultation, IT procurement and a dedicated LiquidSpace concierge to help manage a customer’s move and the facility manager’s needs. altSpace combines carefully curated office fit-outs with LiquidSpace approved landlord and partner spaces. An area where LiquidSpace is adding to the available flexible office options is through altSpace.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |