Houston Office Market
Average annual full-service asking rental rates rose slightly to $30.00/SF, reflecting a 0.4% increase year over year. Overall vacancy rates remained at 25.4%, in the second quarter of 2024, reflecting no change quarter over quarter and increasing by 80 basis points year over year. The under-construction pipeline remains muted, with 1.2 MSF in progress. Total leasing activity closed the quarter at 3.1 MSF, well below the long-term second-quarter average of 4.4 MSF. The average lease size was 3,713 SF, an increase of 3.6% quarter over quarter and a decrease of 15.1% year over year.
Download Houston Office Market Report 2Q24Houston Industrial Market
The market realized 3.2 MSF of positive absorption in the second quarter of 2024, a decrease of 7.7% quarter over quarter as demand begins to slow. Overall rental rates grew 3.7% year over year to $9.31/SF, reaching a new all-time high. Construction deliveries totaled to 7.3 SF in the second quarter of 2024, while the pipeline receded for the sixth consecutive quarter to 12.9 MSF under construction. Supply outpaced demand for the sixth consecutive quarter, with new supply pushing vacancy up to 7.6%, an increase of 150 basis points year over year.
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