Savills Studley Releases Q3 2016 Findings for Houston

24 October 2016

Savills Studley, the leading global commercial real estate services firm specializing in tenant representation, has released its 2016 Q3 Houston edition of the Savills Studley Office Market Report.

The quarterly report is an in-depth compilation of office leasing statistics and trends, major transactions, submarket comparisons, employment trends and investment and development trends specific to the Houston region.

Highlights from the 2016 Q3 Houston Office Market Report include:

 

  • Average asking rents decreased again in the third quarter, down 1.5 percent quarter-on-quarter and 1.7 percent year-on-year. Average asking rents for the Houston Region are now at $28.96-per-square-foot, compared to the U.S. Index of $33.06. 
  • The market’s overall and Class A availability rates registered moderate increases in Q3, up 0.6 and 0.8 respectively. 
  • The Central Business District dominated leasing activity in Q3, with nearly half of all space leased in Houston for the quarter occurring in buildings downtown.
  • Major space occupiers are seeking lease restructures and space reductions to mitigate above-market rent obligations. The two largest transactions of the quarter were lease restructures downtown.
  • Bankruptcies are disrupting occupancy levels and the region’s commercial real estate market. Through the first three quarters of 2016, at least 58 energy companies (representing over $50 billion in debt) have filed for bankruptcy.
  • The largest Central Business District lease deals of 2016 reveal a consistent disparity between landlord asking rates and signed lease comparables. Through the first three quarters of the year, the average effective actual rent (inclusive of landlord concessions) has been nearly $11.00/rsf less than the average effective asking rent for signed deals larger than 40,000 square feet.

The 2016 Q3 Savills Studley Houston Office Market Report can be found on Savills Studley’s webpage, as well as a national report and reports for each of the 29 major U.S. markets.

 
 

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