ICOnic News | Houston Office Market: Good, Bad, or a Bit of Both?
HOUSTON OFFICE MARKET: GOOD, BAD, OR A BIT OF BOTH?
The narrative of the Houston Office Market continues to be perplexing and trying to get a clear understanding of what is happening is difficult. Depending on the data source and who you talk to, some suggest this market offers once-in-a-generation opportunities to invest in office assets and others say the need to retrofit your office building into Class A space is essential to survive. So, which narrative is right?
According to Moodys Analytics, "By examining rent data, vacancy rates, and a range of location and property characteristics, we aim to uncover the patterns and trends that contribute to superior rent performance." Meaning many variables can be true because we need to focus more on each specific office property in the unique submarket and not an overarching narrative. Moody also stated that properties in suburban areas performed better due to "less competition and more favorable business environments." In the Houston market, the top performers were not only located in the suburban markets but also tended to be "smaller in size and more likely to be Class B or C properties."
As we continue to see 18.6% of vacancy over the last few quarters, the narrative might change a bit.
No matter the location or class of the office building, there are many opportunities to capitalize on the current state of the market. We see investment opportunities with 35% of loans maturing in 2024 and 2025. In submarkets like the Energy Corridor, Downtown and the Galleria, tenants have a great opportunity to increase their quality space at similar rates. At the end of the day, with mixed messages and varying data, we always recommend consulting an expert in the market.
Christa Therkildsen, Associate
POLISHED LUNCHEON WITH HOUSTON'S FIRST BAPTIST
We are always striving to find ways to encourage and support our ICO Team. Jane Nodskov was asked to speak on a panel at the Polished Network lunch hosted by Houston's First Baptist Church to discuss the different stages of life of professional women. Jane shared the blessings and challenges of being married with young children, as well as how to walk alongside women going through this phase of life. Jane was supported by our team of ICO ladies, and it was a great event celebrating the wonderful women in all chapters of their professional lives.
