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Q2 2014 Houston Office Market Research & Report Forecast
Published By: email@example.com
Houston's office market construction pipeline increases to 17.8M SF
Houston’s strong economy continues to spur office development with over 17.8M SF currently under construction. Over 1.7M SF of new inventory delivered during Q2, bringing 2014 year-to-date delivered inventory to 3.7M SF. Our forecast projects another 4.5M SF of new inventory will be completed by year-end 2014. Much of the construction activity is tied to the energy industry and includes office buildings that Shell Oil, ExxonMobil, BHP, Phillips 66, and Southwestern Energy will occupy once completed.
Houston’s office market posted 1.6M SF of positive net absorption in Q2 2014, pushing year-to-date 2014 net absorption to a positive 2.2M SF.
The citywide average rental rate increased 1.0% from $26.25 per SF to $26.52 per SF over the quarter and 6.4% from $24.93 per SF to $26.52 per SF over the year. The average CBD rental rate increased 8.5%, while the average suburban rental rate increased 6.4% over the year.
The Houston metropolitan area added 93,300 jobs between May 2013 and May 2014, an annual increase of 3.3% over the prior year’s job growth. Local economists have forecasted 2014 job growth to remain strong, expecting between 68,000 and 72,000 new jobs. Houston’s unemployment fell to 5.0% from 6.1% one year ago. Houston area home sales were down by 7.3% between May 2013 and May 2014, the first decline in the past 34 months. The reduction was due to a lack of inventory.
Houston’s economy is expected to remain strong in 2014 due to healthy job growth and continued expansion in the energy sector.
Release Date07/08/2014 - 07:00