Houston Real Estate Market Reports

Houston Office Market

Average annual full-service asking rental rates rose to a new all-time high of $30.29/SF, reflecting a 2.3% increase year over year. Direct rates increased by 2.1% year over year to $30.48/SF while sublease rents rose by 8.8% annually to $24.56/SF, resulting in a widening rent spread of $5.92/SF. Overall vacancy rates rose by only 10 basis points year over year to 25.5% in the third quarter of 2025. On a quarterly basis, vacancy fell by 10 basis points, indicating that occupancies may be beginning to stabilize. The third quarter of 2025 closed with positive absorption of 636,813 SF, a marked improvement quarter over quarter, and bringing year-to-date totals to positive 1.2 MSF for 2025. Total leasing activity closed the quarter at 3.6 MSF, below the long-term third-quarter average of 4.5 MSF. Fewer deals transacted during the quarter, falling 17.1% year over year, but the average lease size increased by 17.3% over the same period to 4,571 SF.

Houston Industrial Market

The market realized 1.6 MSF of positive absorption in the third quarter of 2025, a quarterly decrease of 37.0%. Overall rental rates rose 13.0% year over year to $10.52/SF, reaching a new all-time high for the sixth consecutive quarter. Construction deliveries declined to 4.7 MSF in the third quarter of 2025, while the pipeline grew to 20.8 MSF under construction. The vacancy rate rose by 30 basis points quarter over quarter and by 60 basis points year over year to 7.4%, driven up by new deliveries and lower demand.