According to a recent report from Avison Young, the office sector is facing ongoing challenges with high vacancy rates. However, there are signs of progress towards recovery. The majority (79%) of vacant office space in the city is found in buildings constructed 20-50 years ago, while newer buildings built since 2010 have a lower vacancy rate of only 12.2%.
Wade Bowlin, Principal and Managing Director at Avison Young’s Houston office stated that falling interest rates and controlled inflation may incentivize building owners to repurpose outdated or aging offices into other uses with potential government incentives.
Despite strong leasing activity in the first half of 2023, leasing velocity has slowed due to tighter financial conditions and an economic slowdown. This has resulted in a significant decline (28.9%) compared to last year’s annual leasing volume and a larger decline (38%) compared to the five-year pre-pandemic average.
The article “Houston Office Leasing Volume Cools Off” was originally published by Connect CRE.
