Houston office market stumbles

Coming into 2020, the Houston office market was poised to navigate headwinds, according to Transwestern, as worldwide demand for energy had fallen precipitously and the decade’s long fracking play had proven unprofitable. Looking forward, the office market now faces a litany of new headwinds as all industries have been impacted from a lost quarter, not just the energy sector. Additionally, the societal impacts of the coronavirus pandemic are likely to change individual level office consumption patterns — potentially affecting overall demand as well as the types of space build-out tenants desire.

Looking at first quarter data, the impacts of COVID-19 have yet to hit the Houston office market, reported Transwestern. Negative quarterly absorption, increasing vacancy and availability for the first quarter were known coming into the year, especially considering the short-term leasing activity occurring in the fourth quarter 2019. But between the collapse in the oil market and