Quarterly Snapshot 3Q23 | Office | Houston Office Market Adjusting to Tenants Downsizing
The Houston Office market continued to grapple with ongoing challenges throughout 3Q23. One of those challenges is a continued high office vacancy rate at 18.7% due to overbuilding in the 1980a™s, tenants downsizing their office footprint, and choosing to sign leases in newer, class A, office buildings instead of older, vintage buildings. This vacancy rate comes as no surprise to the market because it has been a constant obstacle for the past few years. Available inventory of 77.4 million SF for lease continues to be a cloud over the office market. Landlords are still struggling to fill large spaces as tenants are consolidating and reevaluating their needs. Despite these weaknesses, quality lease space and high-end building amenities are factors that are keeping the office market alive.