Houston office market has turbulent 2016
The Houston office market saw a turbulent 2016, according to Newmark Grubb Knight Frank’s Houston 4Q16 Office Market research report. Because the Houston office market relies heavily on energy industry occupiers, the office market has struggled since the price of oil dropped two years ago.
The overall vacancy rate rose 190 basis points during 2016 to 19.6 percent, including an increase of 20 basis points in the fourth quarter. At year-end, the market had negative absorption of 1.4 million square feet, with the class A segment accounting for nearly 70 percent of the overall negative absorption.
Overall, asking rents declined by 2.6 percent, driven by a 3.6 percent drop in the class A segment relative to a modest 1.6 percent contraction in the class B segment. The overall availability rate stood at 26.6 percent, up from 26.2 percent in the prior quarter.
Knight Frank notes there are signs fundamentals are turning a corner in 2017. To start,