Quarterly Snapshot 1Q24 | Office | Houston Office Market Struggles to Find Stability
The Houston office market is struggling to find its footing as vacancy rates climb and leasing activity slows down. The total leasing activity for 1Q24 reached 2.5 million SF, significantly lower than the long-term average of 4.3 million SF for the first quarter. The decrease in leasing activity is primarily attributed to fewer transactions being completed, possibly due to a more challenging environment regarding debt liquidity. Furthermore, in 1Q24 the construction pipeline fell short of the national development average and lagged behind numerous markets of similar size. Nonetheless, in terms of completed deliveries, the metropolitan area surpassed all its counterparts by delivering 36,497 SF. As the year progresses and tenants seek out office space, we should see leasing activity eventually increase.