Wednesday, January 14, 2009

Houston, Tx. ends year with Postive Net Absorption

The Houston office market ended 2008 with positive net absorption, but it was the lowest annual absorption total since 2004, according to the Office Market Trends Houston report by Grubb & Ellis Co.
The quarterly report shows 470,678 square feet of positive net absorption during fourth-quarter 2008, resulting in 776,487 square feet of net absorption for the year.
In comparison, Houston posted more than 6 million square feet of positive absorption in the office market in 2007.
Class A office buildings were responsible for most of the 2008 net absorption, or net change in the amount of occupied space. A total of 165,184 square feet of Class A space was absorbed during the fourth quarter, resulting in 1.1 million square feet of positive net absorption for the year, according to the report.
The nicest office buildings also had the lowest vacancy rate among all classes of office space. Class A vacancy increased by 120 basis points to 11.3 percent for the quarter, the Grubb & Ellis report shows.
Houston’s sublease space rose by 116,261 square feet in the fourth quarter to nearly 2.6 million square feet. Despite the quarterly increase, Houston’s sublease space is only 1.6 percent of the overall inventory, which is lower than the national average of 2.3 percent.
The asking rent rate was higher at the end of 2008 than it was at the end of 2007, but Grubb & Ellis reports that rent increases have slowed and landlords are offering more concessions to tenants. For more information see: www.houstonrealtyadvisors.com or www.houstonrealtyadvisors.net