posted on April 22, 2011 01:07
Houston had the strongest performing office market in the south during the first quarter, according to a report by real estate services company Cassidy Turley.
Houston had a positive net absorption of 710,000 square feet, led by BG Group’s decision to expand their lease to 354,000 square feet in the BG Group Place skyscraper at 811 Main.
In comparison, Houston net absorption for all of 2010 was 1.2 million square feet, the report stated.
The overall office vacancy rate in Houston stood at 15.1 percent in the first quarter, unchanged from the previous quarter, Cassidy Turley reported.
The local office market ranked fourth nationwide in net absorption in the report, behind San Jose-Silicon Valley, Calif.; San Mateo County, Calif.; and Seattle.
The real estate company said of the 82 markets studies, 52 registered increases in net office space absorption in the first quarter. Net demand rose by 7.5 million square feet and the average office vacancy rate fell 0.3 percent to 16.5 percent.
Rents increased five cents to an average $21.36 per square foot last quarter, Cassidy Turley said.
Overall rental rates in Houston dropped by 2.5 percent in the first quarter, to $22.65 per square foot.
“This is the first report in over two years that shows all of the metrics used to measure the health of the U.S. office sector are strengthening,” said Kevin Thorpe, Cassidy Turley’s chief economist. “We need many more reports similar to this one before the recovery will be completed, but clearly the office sector is heading in the right direction.”
In February, buildings listed for sale totaled $6 billion, the highest since June 2008.
The Cassidy Turley report, which used Real Capital Analytics data, showed $339.6 million worth of Houston office buildings had been sold during the first quarter.
4/5/11, Houston Business Journal