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Houston’s office market makes small gains in Q1
Research & Forecast Report
HOUSTON | OFFICEQ1 2019
Lisa Bridges Director of Market Research | Houston
Houston’s office market continues to slowly improve, filling vacant space emptied during the energy downturn. In Q1 2019, the market posted positive absorption of 724,000 SF, a substantial increase from the negative 1.2 million SF of absorption recorded one year ago. Leasing activity decreased over the quarter from 5.1M SF to 2.8M SF. Houston’s overall vacancy rate fell slightly from 19.8% to 19.5% over the quarter, but is still well above Houston’s pre-downturn average vacancy rate in 2014 of 11.6%.
Construction activity remained the same at 2.5M SF as developers continue to show constraint by holding off on proposed projects. Only 100,000 SF delivered during Q1 2019 and only 50,000 SF is in the pipeline scheduled to deliver next quarter.
Houston’s job growth increased by 2.4% over the year, according to recent data released by the U.S. Bureau of Labor Statistics. The Houston MSA created 72,600 jobs (not seasonally adjusted) between February 2018 and February 2019, growing faster than the U.S. during the same time period. Employment sectors with the most substantial growth include support activities for mining which grew by 9.0% over the year, durable goods manufacturing up by 7.6% and construction which increased by 7.1% over the year.
Summary Statistics Houston Office Market Q1 2018 Q4 2018 Q1 2019
Vacancy Rate 19.9% 19.8% 19.5%
Net Absorption (Million Square Feet) -1.2 1.7 0.7
New Construction (Million Square Feet) 0.4 0.8 0.1
Under Construction (Million Square Feet) 1.6 2.5 2.5
Class A Vacancy Rate CBD Suburban
19.0%22.6%
18.7%21.7%
18.7%21.3%
Asking Rents Per Square Foot Per Year
Houston Class A $34.80 $34.77 $35.59
CBD Class A $44.23 $45.27 $45.76
Suburban Class A $32.24 $31.89 $32.29
Market IndicatorsRelative to prior period
AnnualChange
Quarterly Change
Quarterly Forecast*
VACANCY
NET ABSORPTION
NEW CONSTRUCTION
UNDER CONSTRUCTION
*Projected
Share or view online at colliers.com/houston
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
CBD Vacancy Suburban Vacancy
2 Houston Research & Forecast Report | Q1 2019 | Office | Colliers International
Vacancy & Availability
Houston’s citywide vacancy rate decreased 30 basis points from 19.8% to 19.5% over the quarter. The average suburban vacancy rate decreased 70 basis points from 19.8% to 19.1% and the average CBD vacancy rate fell 30 basis points from 21.4% to 21.1% between quarters.
The average Class A vacancy rate in the CBD remained stable over the quarter at 18.7%, and the average Class B vacancy rate in the CBD fell from 31.6% to 30.3%. The average suburban Class A vacancy rate decreased 40 basis points from 21.7% to 21.3% between quarters, while the average suburban Class B vacancy decreased 80 basis points from 18.7% to 17.9%.
Of the 1,704 existing office buildings in our survey, 79 buildings have 100,000 SF or more contiguous space available for lease or sublease. Of these, 26 buildings have contiguous space of 200,000 SF or more available. Citywide, available sublease space decreased over the quarter from 7.8 million SF to 7.4 million SF. Available space differs from vacant space in that it includes space that is currently being marketed for lease, but may be occupied with a future availability date. In contrast, unoccupied is truly vacant and is available immediately.
Large Sublease Availabilities (Total available in building and/or complex)
BUILDING TENANT SUBMARKET SF5 Greenway Plaza Oxy Greenway Plaza 746,070
Four WestLake Park BP Katy Freeway 454,487
Energy Tower II KTI Corporation (Technip) Katy Freeway 297,919
1500 Post Oak Blvd BHP Billiton Petroleum West Loop 273,127
One Shell Plaza Shell Oil CBD 252,075
NRG Tower Reliant Energy Retail CBD 237,994
Three WestLake Park Phillips 66 Katy Freeway 221,723
Hess Tower Hess Corporation CBD 215,887
Westway III GE Oil & Gas West Belt 182,004
1100 Louisiana Enbridge CBD 179,694
Source: CoStar
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Class A Class B Houston Total
Job Growth & Unemployment(not seasonally adjusted)
UNEMPLOYMENT 2/18 2/19
HOUSTON 4.7% 4.2%
TEXAS 4.1% 3.9%
U.S. 4.4% 4.1%
JOB GROWTHAnnual Change
# of Jobs Added
HOUSTON 2.4% 72.6K
TEXAS 2.2% 273.2K
U.S. 1.7% 2.5M
CBD vs. SuburbanCLASS A OFFICE VACANCY
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
CBD Rents Suburban Rents
CLASS A OFFICE RENTS
HISTORICAL AVAILABLE SUBLEASE SPACE
AVAILABLE SUBLEASE SPACE - 125,000 SF OR GREATER
33 Houston Research & Forecast Report | Q1 2019 | Office | Colliers International
Absorption & Demand
Houston’s office market posted 724,000 SF of positive net absorption in Q1 2019, a 58% decrease from the previous quarter. Suburban Class A space recorded the largest gain, posting 606,639 SF of positive net absorption. A few of the tenants that relocated during the first quarter include American Bureau of Shipping (moving into 303,000 SF in CityPlace 2 in The Woodlands submarket), Asurion (moving into 129,000 SF in Legacy at Fallbrook in the West Belt submarket) and Houston Forensic Science Center (occupying 83,000 SF in Jefferson Towers at Cullen Center located in the CBD submarket).
Rental Rates
Houston’s average asking rental rate increased over the quarter from $29.04 per SF to $29.20 per SF. The Class A average asking rental rate rose over the quarter from $34.80 per SF to $35.59 per SF, and the average CBD Class A rental rate also rose from $45.27 to $45.76 per SF. The Suburban Class A average asking rental rate increased from $31.89 to $32.29 per SF.
Leasing Activity
Houston’s office leasing activity decreased over the quarter from 5.1M SF to 2.8M SF. Leasing activity includes new/direct, sublet, renewals, expansions in existing buildings and pre-leasing in proposed buildings. Some of the more notable transactions are noted in the table below.
Q1 2019 Select Office Lease TransactionsBUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE
Heritage Plaza CBD 204,210 Deloitte2 Jan-19
Loop Central II Bellaire 113,600 UniversalPegausus International2 Jan-19
Sam Houston Crossing II West Belt 108,639 Forum Energy Technologies2 Jan-19
2 Houston Center CBD 105,578 Direct Energy1 Mar-19
17000 Katy Freeway Katy Freeway 59,220 CAM Integrated Solutions1 Feb-19
609 Main at Texas CBD 57,139 EnVen Energy Corp1 Feb-19
2 Houston Center CBD 45,000 Gensler Architecture1 Mar-19
Lake Front North The Woodlands 26,103 ExxonMobil1,3 Jan-19
1New/Direct 2Renewal 3Colliers International Transaction
Sales Activity
Houston’s office investment sales volume decreased over the quarter by 37.8% to 371.5M from 597.2M in Q1 2019. The average sales price per square foot trended up from $170 to $187 per SF over the quarter. Houston’s average cap rate of 7.3% is higher than the average U.S. cap rate of 6.6%.
Sources: CoStar and Real Capital Analytics
$0
$50
$100
$150
$200
$250
$300
United States Houston, TX
AVERAGE OFFICE SALES PRICE PER SF
6.0%
6.2%
6.4%
6.6%
6.8%
7.0%
7.2%
7.4%
7.6%
7.8%
United States Houston, TX
AVERAGE OFFICE CAP RATE
4 Houston Research & Forecast Report | Q1 2019 | Office | Colliers International
Houston Office Market Summary (CBD, Suburban, & Overall)
INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION
(SF)RENTAL
RATE
CLASS # OF BLDGS. TOTAL (SF) (SF) RATE
(%) (SF) RATE (%)
TOTAL (SF) Q1-2019 Q4-2018 Q1-2019 Q4-2018 AVG
($/SF)
CBD
A 35 32,862,991 5,262,317 16.0% 872,623 0.0% 6,134,940 18.7% 18.7% 9,687 219,116 $45.76
B 30 9,713,710 2,852,027 29.4% 95,086 0.0% 2,947,113 30.3% 31.6% 122,347 6,004 $30.65
C 13 900,419 76,500 8.5% 0 0.0% 76,500 8.5% 8.5% 0 0 $20.15
Total 78 43,477,120 8,190,844 18.8% 967,709 2.2% 9,158,553 21.1% 21.4% 132,034 225,120 $38.03
SUBURBAN
A 388 95,675,625 17,646,456 18.4% 2,753,154 2.9% 20,399,610 21.3% 21.7% 606,639 1,212,401 $32.29
B 953 78,573,381 13,663,840 17.4% 417,619 0.5% 14,081,459 17.9% 18.7% 44,711 255,694 $20.69
C 285 12,058,042 1,118,268 9.3% 27,724 0.2% 1,145,992 9.5% 9.1% -59,384 48,048 $18.02
Total 1626 186,307,048 32,428,564 17.4% 3,198,497 1.7% 35,627,061 19.1% 19.8% 591,966 1,516,143 $27.05
OVERALL
A 423 128,538,616 22,908,773 17.8% 3,625,777 2.8% 26,534,550 20.6% 21.0% 616,326 1,431,517 $35.59
B 983 88,287,091 16,515,867 18.7% 512,705 0.6% 17,028,572 19.3% 19.5% 167,058 261,698 $22.41
C 298 12,958,461 1,194,768 9.2% 27,724 0.2% 1,222,492 9.4% 9.0% -59,384 48,048 $18.16
Total 1704 229,784,168 40,619,408 17.7% 4,166,206 1.8% 44,785,614 19.5% 19.8% 724,000 1,741,263 $30.47
INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION
(SF)RENTAL
RATE
CLASS # OF BLDGS. TOTAL (SF) (SF) RATE
(%) (SF) RATE (%)
TOTAL (SF) Q1-2019 Q4-2018 Q1-2019 Q4-2018 AVG
($/SF)
ALLEN PARKWAY (MIDTOWN)
A 8 2,284,619 376,663 16.5% 2,459 0.1% 379,122 16.6% 16.1% -11,990 4,903 $33.71
B 34 2,452,908 264,559 10.8% 5,637 0.0% 270,196 11.0% 10.0% -25,965 -8,465 $27.33
C 13 403,219 102,926 25.5% 0 0.0% 102,926 25.5% 25.5% 0 1,100 $27.01
Total 55 5,140,746 744,148 14.5% 8,096 0.2% 752,244 14.6% 12.8% -37,955 -2,462 $30.52
BAYTOWN
B 3 186,005 5,861 3.2% 0 0.0% 5,861 3.2% 4.6% 2,679 0 $21.45
C 3 81,481 10,513 12.9% 0 0.0% 10,513 12.9% 3.1% -8,013 0 -
Total 6 267,486 16,374 6.1% 0 0.0% 16,374 6.1% 4.1% -5,334 0 $21.45
BELLAIRE
A 7 1,375,713 132,108 9.6% 13,982 1.0% 146,090 10.6% 12.4% 24,505 -11,040 $29.26
B 19 2,451,213 499,174 20.4% 15,406 0.6% 514,580 21.0% 20.8% -4,110 7,402 $23.38
C 6 344,785 37,303 10.8% 0 0.0% 37,303 10.8% 10.6% -732 -2,053 $17.94
Total 32 4,171,711 668,585 16.0% 29,388 0.7% 697,973 16.7% 8.4% 19,663 -5,691 $24.24
CONROE AND OUTLYING MONTGOMERY CO
A 2 88,449 28,449 32.2% 0 0.0% 28,449 32.2% 32.2% 0 0 $23.53
B 9 365,415 21,952 6.0% 0 0.0% 21,952 6.0% 6.4% 1,474 0 $18.00
C 7 287,369 17,961 6.3% 0 0.0% 17,961 6.3% 6.2% -106 -3,087 $15.47
Total 18 741,233 68,362 9.2% 0 0.0% 68,362 9.2% 1.8% 1,368 -3,087 $9.84
E. FORT BEND CO SUGAR LAND
A 17 3,399,208 204,998 6.0% 92,409 2.7% 297,407 8.7% 8.5% -8,496 60,205 $32.16
B 40 2,411,540 342,286 14.2% 8,231 0.3% 350,517 14.5% 14.2% -8,119 -49,192 $23.88
C 5 146,524 0 0.0% 0 0.0% 0 0.0% 0.0% 0 0 $13.02
Total 62 5,957,272 547,284 9.2% 100,640 1.7% 647,924 10.9% 10.3% -16,615 11,013 $26.98
Houston Suburban Office Market Summary
5 Houston Research & Forecast Report | Q1 2019 | Office | Colliers International
Houston Suburban Office Market Summary - Continued
INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION
(SF)RENTAL
RATE
CLASS # OF BLDGS.
TOTAL (SF) (SF) RATE
(%) (SF) RATE (%)
TOTAL (SF) Q1-2019 Q4-2018 Q1-2019 Q4-2018 AVG
($/SF)
FM 1960 A 13 2,968,984 349,617 11.8% 23,539 0.8% 373,156 12.6% 12.2% -10,243 7,162 $27.65B 69 4,244,236 737,375 17.4% 34,761 0.8% 772,136 18.2% 19.4% 50,459 -4,232 $16.56C 22 786,531 62,238 7.9% 2,058 0.3% 64,296 8.2% 7.9% -2,012 12,243 $14.76Total 104 7,999,751 1,149,230 14.4% 60,358 0.8% 1,209,588 15.1% 16.8% 38,204 15,173 $19.84GREENWAY PLAZAA 21 7,429,743 1,239,812 16.7% 66,116 0.9% 1,305,928 17.6% 18.1% 42,107 24,962 $38.84B 31 3,105,092 321,077 10.3% 0 0.0% 321,077 10.3% 9.2% -35,675 86,933 $27.05C 13 433,479 36,135 8.3% 0 0.0% 36,135 8.3% 7.9% -1,932 1,357 $21.44Total 65 10,968,314 1,597,024 14.6% 66,116 0.6% 1,663,140 15.2% 17.5% 4,500 113,252 $36.08GULF FREEWAY PASADENA A 2 105,782 29,975 28.3% 0 0.0% 29,975 28.3% 28.3% 0 0 -B 45 2,538,092 238,591 9.4% 2,398 0.1% 240,989 9.5% 9.5% 729 28,710 $21.63C 25 953,742 132,075 13.8% 0 0.0% 132,075 13.8% 13.8% -450 -26,740 $23.53Total 72 3,597,616 400,641 11.1% 2,398 0.1% 403,039 11.2% 14.6% 279 1,970 $22.25I-10 EASTB 6 427,851 59,967 14.0% 0 0.0% 59,967 14.0% 14.8% 3,368 11,181 $17.17C 6 302,414 0 0.0% 0 0.0% 0 0.0% 0.0% 0 13,000 $20.83Total 12 730,265 59,967 8.2% 0 0.0% 59,967 8.2% 16.3% 3,368 24,181 $17.17KATY FREEWAYA 94 23,211,900 3,957,606 17.0% 1,073,519 4.6% 5,031,125 21.7% 22.1% 108,843 425,866 $36.76B 101 9,298,004 2,140,511 23.0% 50,065 0.5% 2,190,576 23.6% 23.3% -27,634 38,746 $22.50C 29 1,363,282 106,743 7.8% 2,666 0.2% 109,409 8.0% 8.4% 4,978 4,517 $20.29Total 224 33,873,186 6,204,860 18.3% 1,126,250 3.3% 7,331,110 21.6% 22.0% 86,187 469,129 $31.56KATY GRAND PARKWAYA 17 1,629,940 181,037 11.1% 8,302 0.5% 189,339 11.6% 14.3% 43,866 40,482 $27.00B 16 1,042,328 10,270 100.0% 0 0.0% 10,270 100.0% 2.9% 20,337 -5,143 $23.02C 2 149,262 0 0.0% 0 0.0% 0 0.0% 0.0% 0 0 -Total 35 2,821,530 191,307 6.8% 8,302 0.3% 199,609 7.1% 10.1% 64,203 35,339 $26.83KINGWOOD HUMBLEB 20 1,313,659 75,972 5.8% 0 0.0% 75,972 5.8% 6.5% 9,148 15,896 $21.63C 4 131,139 240 20.0% 0 0.0% 240 20.0% 20.0% 0 -25 $19.43Total 24 1,444,798 76,212 5.3% 0 0.0% 76,212 5.3% 6.2% 9,148 15,871 $21.62NASA CLEAR LAKE A 12 1,778,721 170,381 9.6% 2,390 0.1% 172,771 9.7% 10.7% 17,222 -18,894 $26.68B 44 3,023,876 810,972 26.8% 0 0.0% 810,972 26.8% 26.2% -17,302 -19,266 $19.97C 18 582,500 69,412 11.9% 0 0.0% 69,412 11.9% 11.4% -2,815 8,694 $16.98Total 74 5,385,097 1,050,765 19.5% 2,390 0.0% 1,053,155 19.6% 22.9% -2,895 -29,466 $20.86NORTH BELT GREENSPOINT
A 25 5,520,879 3,266,528 59.2% 11,628 0.2% 3,278,156 59.4% 60.6% 69,406 48,097 $22.02B 57 5,910,207 1,853,924 31.4% 14,484 0.2% 1,868,408 31.6% 30.0% -95,443 8,007 $15.07C 21 1,373,108 186,808 13.6% 0 0.0% 186,808 13.6% 13.2% -5,040 -19,472 $12.18Total 103 12,804,194 5,307,260 41.4% 26,112 0.2% 5,333,372 41.7% 44.3% -31,077 36,632 $19.25NORTHEAST NEAR AND OUTLIERA 3 642,223 21,702 3.4% 6355 1.0% 28,057 4.4% 3.4% -6,355 0 -B 5 219,799 12,282 5.6% 8,000 3.6% 20,282 9.2% 15.4% 13,656 -15,430 $20.54C 2 56,562 16,778 29.7% 0 0.0% 16,778 29.7% 28.0% -935 -3,808 $15.00Total 10 918,584 50,762 5.5% 14,355 1.6% 65,117 7.1% 6.3% 6,366 -19,238 $18.33
6 Houston Research & Forecast Report | Q1 2019 | Office | Colliers International
Houston Suburban Office Market Summary - Continued
INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION
(SF)RENTAL
RATE
CLASS # OF BLDGS.
TOTAL (SF) (SF) RATE
(%) (SF) RATE (%)
TOTAL (SF) Q1-2019 Q4-2018 Q1-2019 Q4-2018 AVG
($/SF)
NORTHWEST AND NORTHWEST OUTLIERA 9 1,985,781 837,875 42.2% 1,203 0.1% 839,078 42.3% 42.3% 269 10,516 $23.08B 75 5,887,544 1,010,428 17.2% 1,705 0.0% 1,012,133 17.2% 16.0% -71,690 30,885 $19.24C 30 1,226,857 64,668 5.3% 3000 0.2% 67,668 5.5% 5.8% 3,716 1,854 $15.62Total 114 9,100,182 1,912,971 21.0% 5,908 0.1% 1,918,879 21.1% 20.0% -67,705 43,255 $20.80RICHMOND FOUNTAINVIEWB 15 915,674 101,723 11.1% 0 0.0% 101,723 11.1% 9.9% -10,685 23,073 $16.97C 10 392,300 22,919 5.8% 0 0.0% 22,919 5.8% 6.8% 3,936 5,180 $16.85Total 25 1,307,974 124,642 9.5% 0 0.0% 124,642 9.5% 12.7% -6,749 28,253 $16.95SAN FELIPE VOSSA 3 1,720,793 395,056 23.0% 21,661 1.3% 416,717 24.2% 24.9% 11,782 67,681 $36.89B 30 3,158,351 580,501 18.4% 39,657 1.3% 620,158 19.6% 18.0% -51,158 -26,201 $24.84Total 33 4,879,144 975,557 20.0% 61,318 1.3% 1,036,875 21.3% 22.0% -39,376 41,480 $29.72SOUTH B 12 358,303 29,412 8.2% 0 0.0% 29,412 8.2% 6.8% -5,108 1,525 $24.43C 5 195,387 31,650 16.2% 0 0.0% 31,650 16.2% 13.4% -5,550 0 $27.83Total 17 553,690 61,062 11.0% 0 0.0% 61,062 11.0% 8.0% -10,658 1,525 $27.26SOUTH MAIN MEDICAL CENTERA 1 485,000 0 0.0% 0 0.0% 0 0.0% 0.0% 0 0 -B 12 829,793 101,190 12.2% 0 0.0% 101,190 12.2% 11.0% -9,602 2,581 $18.42C 7 286,418 61,119 21.3% 0 0.0% 61,119 21.3% 20.7% -1,780 156 $19.71Total 20 1,601,211 162,309 10.1% 0 0.0% 162,309 10.1% 9.7% -11,382 2,737 $18.92SOUTHEASTB 17 1,271,884 62,665 4.9% 0 0.0% 62,665 4.9% 4.5% -5,712 5,903 $17.86C 2 118,209 0 0.0% 0 0.0% 0 0.0% 0.0% 0 22,233 -Total 19 1,390,093 62,665 4.5% 0 0.0% 62,665 4.5% 8.1% -5,712 28,136 $17.86SOUTHWESTA 6 1,580,642 450,388 28.5% 0 0.0% 450,388 28.5% 27.0% -23,217 -36,161 $17.28B 63 6,119,094 1,281,774 20.9% 62,634 1.0% 1,344,408 22.0% 23.4% 85,923 -54,197 $16.40C 34 1,714,348 129,690 7.6% 0 0.0% 129,690 7.6% 5.7% -31,420 44,366 $14.32Total 103 9,414,084 1,861,852 19.8% 62,634 0.7% 1,924,486 20.4% 19.3% 31,286 -45,992 $16.47
SOUTHWEST FAR AND OUTLIER A 2 158,720 19,737 12.4% 0 0.0% 19,737 12.4% 12.4% 0 0 -B 12 924,340 58,750 6.4% 0 0.0% 58,750 6.4% 23.0% 153,631 20,954 $12.00C 3 91,661 7,000 7.6% 0 0.0% 7,000 7.6% 7.6% 0 0 $15.60Total 17 1,174,721 85,487 7.3% 0 0.0% 85,487 7.3% 22.9% 153,631 20,954 $12.38WEST BELTA 29 3,731,839 746,909 20.0% 228,308 6.1% 975,217 26.1% 27.6% 56,146 29,414 $28.68B 37 2,106,925 344,867 16.4% 75,954 3.6% 420,821 20.0% 19.7% -4,802 25,548 $22.15C 4 112,629 0 0.0% 20000 17.8% 20,000 17.8% 8.9% -10,000 -10,000 -Total 70 5,951,393 1,091,776 18.3% 324,262 5.4% 1,416,038 23.8% 28.8% 41,344 44,962 $26.62WEST LOOPA 50 18,014,110 3,089,172 17.1% 391,945 2.2% 3,481,117 19.3% 19.1% -48,191 195,790 $38.56B 53 6,037,326 825,704 13.7% 49,168 0.8% 874,872 14.5% 15.1% 34,458 28,802 $27.43C 4 216,268 11,897 5.5% 0 0.0% 11,897 5.5% 3.5% -4,379 -4,575 $21.48Total 107 24,267,704 3,926,773 16.2% 441,113 1.8% 4,367,886 18.0% 18.9% -18,112 220,017 $36.17
7 Houston Research & Forecast Report | Q1 2019 | Office | Colliers International7
Office Development Pipeline
2.5 million SF of office space is under construction, all of which is spec development and 41.6% is pre-leased. The table below includes office buildings under construction with an RBA of 100,000 SF or more.
BUILDING NAME ADDRESS SUBMARKET SF PRE-LEASED DEVELOPER/CONTRACTOR EST.
DELIVERY
801 Texas 801 Texas Ave CBD 1,110,220 32.8% Hines Securities, Inc. Oct-21
Capitol Tower 800 Capitol St CBD 778,344 79.6% SCD Acquisitions LLC Jun-19
Park Place | River Oaks 4200 Westheimer West Loop 207,202 0% Stonelake Capital Partners Mar-20
Chasewood Crossing Three 19350 State Highway 249 FM 1960 156,000 3.0% Greenwood Properties Aug-19
CityPlace 1 1700 City Plaza Dr The Woodlands 149,500 18.0% Patrinely Group, LLC Jun-19
City Place 1401 Lake Plaza Dr The Woodlands 48,840 45.2% Patrinely Group, LLC May-19
Buffalo Heights 3663 Washington Ave Midtown 35,363 0% SG Interests Sep-19
Cross Creek Ranch Office Cross Creek Ranch Bvd Southwest Outlier 27,000 57.3% The Marcel Group Mar-20
Houston Suburban Office Market Summary - Continued
INVENTORY DIRECT VACANCY SUBLEASE VACANCY VACANCY VACANCY RATE (%) NET ABSORPTION
(SF)RENTAL
RATE
CLASS # OF BLDGS.
TOTAL (SF) (SF) RATE
(%) (SF) RATE (%)
TOTAL (SF) Q1-2019 Q4-2018 Q1-2019 Q4-2018 AVG
($/SF)
WESTCHASEA 34 10,002,462 2,019,433 20.2% 757,195 7.6% 2,776,628 27.8% 26.9% -88,714 -62,803 $33.93B 62 7,611,290 1,435,303 18.9% 25,823 0.3% 1,461,126 19.2% 19.9% 55,703 151,889 $21.91C 5 176,872 10,193 5.8% 0 0.0% 10,193 5.8% 5.8% 0 0 $15.00Total 101 17,790,624 3,464,929 19.5% 783,018 4.4% 4,247,947 23.9% 19.8% -33,011 89,086 $28.65THE WOODLANDS A 53 12,594,743 929,015 7.4% 75,682 0.6% 1,004,697 8.0% 11.1% 396,239 397,222 $35.84B 66 4,362,632 436,750 10.0% 23,696 0.5% 460,446 10.6% 10.2% -13,849 -50,215 $24.92C 5 131,696 0 0.0% 0 0.0% 0 0.0% 2.4% 3,150 3,108 $18.87Total 124 17,089,071 1,365,765 8.0% 99,378 0.6% 1,465,143 8.6% 9.2% 385,540 350,115 $32.35
2 31600 TRAVIS
600 Travis Street1,656,529 / 22,575 / 75
83.7%584,772192,461$43.40
1.0Texas Tower Ltd
717 TEXAS717 Texas Avenue
696,228 / 27,500 / 3352.7%321,149300,969$45.75
1.3Hines
BANK OF AMERICA CENTER700 Louisiana Street
1,268,480 / 25,000 / 5687.9%
394,62986,435$44.49
2.0M-M Properties
BUILDING NAMEADDRESS
RBA / AVG FLOOR / # OF FLOORS% LEASED
TOTAL AVAILABLE SFMAX CONTIGUOUS SF
QUOTED RATE**PARKING RATIO
OWNER
AVAILABLE* SUBLEASE*
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
TWO ALLEN CENTER1200 Smith Street
995,623 / 26,613 / 3692.2%
435,122171,358$44.97
1.0Brook�eld O�ceProperties, Inc.
THREE ALLEN CENTER333 Clay Street
1,194,719 / 25,000 /5092.4%
297,84325,303$46.17
1.0Brook�eld O�ceProperties, Inc.
1100 LOUISIANA1100 Louisiana Street
1,327,882 / 23,060 / 5599.7%
324,527225,487$43.36
1.8Enterprise Products
Partners L.P.
HERITAGE PLAZA1111 Bagby Street
1,212,895 / 26,652 / 51100%29,29529,295$52.76
2.4Brook�eld O�ceProperties, Inc.
CENTERPOINT ENERGY1111 Louisiana Street
1,081,251 / 22,968 / 47100%
00
N/A2.5
CenterPoint Energy, Inc.
ONE ALLEN CENTER500 Dallas Street
993,297 / 29,214 / 3484.6%160,61770,171
$46.531.0
Brook�eld O�ceProperties, Inc.
KINDER MORGAN BLDG.1001 Louisiana Street937,003 / 28,510 / 32
100%124,600124,600
N/A1.0
EPEC Property Holdings
TOTAL PLAZA1201 Louisiana Street
843,533 / 24,600 / 3598.5%36,8988,867
$41.801.0
Brook�eld O�ceProperties, Inc.
1918 2322 262120 24 25WELLS FARGO PLAZA1000 Louisiana Street
1,721,242 / 25,000 / 7175.7%
531,048101,773$49.65
1.7New York State Common
Retirement Fund
BUILDING NAMEADDRESS
RBA / AVG FLOOR / # OF FLOORS% LEASED
TOTAL AVAILABLE SFMAX CONTIGUOUS SF
QUOTED RATE**PARKING RATIO
OWNER
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
811 MAIN STREET811 Main Street
972,474 / 27,000 / 4694.5%
136,329133,441$51.91
1.2Invesco Advisers, Inc.
ONE SHELL PLAZA910 Louisiana Street
1,228,923 / 24,572 / 5088.3%
403,085158,813$45.24
0.3Busycon Properties LLC
NORTH BLDG700 Milam Street
679,337 / 20,523 / 3664.7%
232,193142,954$44.95
3.0Metropolis Investment
Holdings Inc.
2 HOUSTON CENTER909 Fannin Street
1,024,956 / 25,624 / 4075.1%
286,50370,144$43.93
1.0Brook�eld Asset Management Inc.
LYONDELLBASELL TOWER1221 McKinney Street
1,065,215 / 24,000 / 4691.0%
192,01694,080$45.20
1.0Brook�eld Asset Management Inc.
811 LOUISIANA811 Louisiana Street
588,423 / 31,500 / 2652.9%
274,524220,529$41.93
2.0Busycon Properties LLC
SOUTH BLDG711 Louisiana Street
664,940 / 20,000 / 3479.3%
298,812204,281$44.95
3.0Metropolis Investment
Holdings Inc.
FULBRIGHT TOWER1301 McKinney Street
1,247,061 / 24,452 / 5175.0%467,16775,376$45.19
1.0Brook�eld Asset Management Inc.
5 HOUSTON CENTER1401 McKinney Street580,875 / 29,649 / 27
93.0%198,764147,986$50.00
2.0Spear Street Capital
1110 13124 5 96 7PENNZOIL PLACE609 MAIN at TEXAS
609 Main Street1,056,658 / 28,000 / 48
78.8%217,385142,410$52.00
1.7Hines
8
ONE CITY CENTRE1021 Main Street
608,660 / 21,266 / 2977.0%
416,580187,693$30.09
2.3Accesso Partners, LLC
1000 MAIN1000 Main Street
837,161 / 23,333 / 3680.2%
204,952144,394$52.06
2.0Union Investment
Real Estate
1001 FANNIN1001 Fannin Street
1,385,212 / 27,210 / 4995.3%
617,826393,634$44.51
1.0JMB Financial Advisors
171514HILCORP ENERGY TOWER
1111 Main Street406,600 / 17,678 / 23
95.7%00
N/AN/A
Hilcorp Ventures Inc.
16
CLASS A OFFICE BUILDINGSCENTRAL BUSINESS DISTRICT HOUSTON, TEXAS
APRIL 2019
Available June 2019147,986 SF
393,634 SFAvailable Nov 2021
187,693 SFAvailable Jan 2021
AVAILABLE* SUBLEASE*
BUILDING NAMEADDRESS
RBA / AVG FLOOR / # OF FLOORS% LEASED
TOTAL AVAILABLE SFMAX CONTIGUOUS SF
QUOTED RATE**PARKING RATIO
OWNER
1500 LOUISIANA1500 Louisiana Street
1,157,690 / 25,263 / 40100%
00
N/A1.1
ChevronTexaco Corp.
1301 FANNIN OFFICE TOWER1301 Fannin Street
784,143 / 26,000 / 2490.3%115,23352,544$38.63
1.0Netrality Properties
1400 SMITH1400 Smith Street
1,250,677 / 25,013 / 50100%
00
N/AN/A
Chevron Corporation
1600 SMITH1600 Smith Street
1,098,399 / 23,000 /5153.8%
508,039351,741$37.97
1.0Oracle Corporation
WEDGE INT’L TOWER1415 Louisiana Street520,475 / 18,000 / 43
47.1%290,666119,708$32.74
2.7Wedge Commercial
Properties
HESS TOWER1501 McKinney Street844,763 / 30,500 /29
100%215,887215,887
N/A1.7
H&R REIT
GreenStreet1201 Fannin Street
275,223 / 25,020 / 11100%
249,997249,997
N/A1.5
Midway Companies/Lionstone Investments
29 3027 3128 32 33
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75 CLASS A OFFICE BUILDINGSCENTRAL BUSINESS DISTRICT HOUSTON, TEXAS
APRIL 2019
28
2
3
4 51
10
9
7
6
8
27
1716
15
14
25 2120
29
2426
19
1218
13
11
22
2330
3132
33
*Gold and white indicators are approximate only at the time of printing and are presented to show approximate percentage of availablespace by �oor/building. All indicators are left-to-right and are not meant to show location of available space.
**Rental rates listed are net + operating expenses.
COLLIERS INTERNATIONAL1233 West Loop South, Suite 900
Houston, TX 77027www.colliers.com/texas
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
Available Direct SpaceCentral Business District
Class A Class B
Available Direct SpaceQ1 2019
Class A: 8,671,738 SF or 25.0%Class B: 2,944,898 SF or 30.3%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Available Sublease SpaceCentral Business District
Class A Class B
Available Sublease SpaceQ1 2019
Class A: 1,488,042 SF or 4.3%Class B: 260,538 SF or 2.7%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
$22.00$24.00$26.00$28.00$30.00$32.00$34.00$36.00$38.00$40.00$42.00$44.00$46.00$48.00
Class A Rental Rate and Vacancy Percentage Central Business District - Houston, TX
CBD Class A Rents CBD Class A Vacancy
*Vacancy percentage includes direct and sublease space.
Skylines | Now Available Online at colliers.com/houston
A skyline view of available space for nine of Houston’s Class A office submarkets including the CBD, Galleria, Energy Corridor, Greenway Plaza, NASA/Clear Lake, North Belt, Sugar Land, The Woodlands and Westchase, is now available online.
8 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International
Copyright © 2015 Colliers International.The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
Colliers International | Market000 Address, Suite # 000 Address, Suite #+1 000 000 0000colliers.com/<<market>>
8 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International
Copyright © 2019 Colliers International.The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
Colliers International | Houston1233 West Loop South, Suite 900 Houston, Texas 77027+1 713 222 2111colliers.com/houston
FOR MORE INFORMATIONLisa Bridges, CPRCDirector of Market Research | Houston+1 713 830 [email protected]
Colliers statistical criteria includes all general purpose multi and single tenant office buildings 20,000 SF or greater.
Beth Staggs CPRC, CPMCResearch Coordinator | Houston+1 713 830 [email protected]
Quoted gross rental rates for existing top performing office buildings
BUILDING NAME ADDRESS SUBMARKET RBA (SF) YEAR BUILT
% LEASED
AVAIL. SF
RENT($/SF) OWNER
609 Main at Texas 609 Main St CBD 1,056,658 2017 78.8% 217,385 $52.00 Hines Securities, Inc.
1000 Main 1000 Main St CBD 837,161 2003 80.2% 204,952 $52.00 Union Investment Real Estate
Kirby Grove 2925 Richmond Ave Greenway Plaza 248,275 2015 91.4% 53,832 $47.33 Midway Companies
CityCentre Five 825 Town & Country Blvd Katy Freeway 227,063 2015 92.8% 11,990 $47.58 Midway Companies
Town Centre One 750 Town & Country Blvd Katy Freeway 253,714 2015 86.6% 33,993 $43.09 Moody Rambin
3009 Post Oak 3009 Post Oak Blvd West Loop/Galleria 303,008 2013 86.6% 59,249 $45.46 Post Oak Building LLC
BBVA Compass Plaza 2200 Post Oak Blvd West Loop/Galleria 326,200 2013 96.6% 60,441 $50.84 Corporacion Masaveu S. A.
CityWestPlace 4 2103 CityWest Blvd Westchase 518,907 2000 87.9% 138,407 $45.48 Parkway Realty Management LLC
Two Hughes Landing 1790 Hughes Landing Blvd The Woodlands 197,696 2014 95.5% 13,899 $44.47-$50.47
The Woodlands Development Company, L.P.
Note: Available SF includes direct and sublet space as well as any future available space currently listed. Source: CoStar Property
Q1 2019 Houston Office Highlights
8.0M SF
19.5% 0.7M SFVACANCY NET ABSORPTION
CLASS A: 56% CLASS B: 38% CLASS C: 6%TOTAL INVENTORY BY CLASS
20%ANNUALLY
5%QUARTERLY
AVAILABLESUBLEASE SPACE
CURR
ENT
Q1 2018 9.2M SFQ2 2018 9.3M SFQ3 2018 8.2M SFQ4 2018 7.8M SF
128.5M SF 88.3M SF
13.0M SF
TOTAL OFFICEINVENTORY 229.8M SF
2.8M SF
LEASINGACTIVITY
15%ANNUALLY
45%QUARTERLY
Q1 2019 7.4M SF
Our philosophyrevolves around the fact
that the bestpossible results come
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local advisors whounderstand your
business, your market,and how to
integrate real estateinto a successfulbusiness strategy.
C O L L I E R S I N T E R N A T I O N A L G L O B A L L O C A T I O N S
COMMERCIAL REAL ESTATE SECTORS REPRESENTED
OFF
ICE
IND
US
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IAL
LAN
D
RE
TAIL
HE
ALT
HC
AR
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LTIF
AM
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TE
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$127BTRANSACTION VALUE
2BSF UNDER MANAGEMENT
$3.3BIN REVENUE
438OFFICES
17,300PROFESSIONALS
340ACCREDITED MEMBERS
68COUNTRIES
SIOR
ADVANTAGEColliers International (NASDAQ, TSX: CIGI) is a leading global real estate services and investment management company. With operations in 68 countries, our 14,000 enterprising people work collaboratively to provide expert advice and services to maximize the value of property for real estate occupiers, owners and investors. For more than 20 years, our experienced leadership team, owning more than 40% of our equity, have delivered industry-leading investment returns for shareholders. In 2018, corporate revenues were $2.8 billion ($3.3 billion including a�liates), with more than $26 billion of assets under management.
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