posted on December 06, 2011 23:32
Projections for the Houston commercial real estate market were positive in a report released Nov. 9 by Delta Associates, the research affiliate of Houston-based Transwestern .
Greg Leisch, CEO of Delta Associates, spoke on the Trendlines Houston forecast at the River Oaks Country Club, in an event featuring Tucker Carlson as keynote speaker.
Delta’s statistics vary from those published by commercial real estate firms because it includes single-tenant and owner-occupied space in its calculations.
The Houston-area office market, with a total of 240 million square feet of space, had a 12.2 percent overall vacancy rate (including sublease space) at the end of the third quarter.
The amount of direct vacancy rate was 11.7 percent, down from a cyclical high of 12.7 percent in 2010, Delta reported.
Houston’s office market experienced a net absorption of 3 million square feet during the first nine months of the year, and is on track to end the year with 4 million square feet of absorption, Leisch said.
Delta projects 4 million square feet of net absorption in each of the next two years. If that happens, the overall vacancy rate could drop to 9.8 percent.
“It would be the lowest vacancy rate ever reported in Houston,” said Leisch, noting that only 1.5 million square feet of office space is currently under construction.
Tenants can expect office rental rates to rise as a result.
The 525.1 million-square-foot industrial market had a vacancy rate of 5.3 percent at the end of the third quarter.
Net absorption of industrial space in the Houston area totaled 1.9 million square feet for the first nine months of the year.
A total of 2.3 million square feet of industrial space was under construction in the greater Houston area at the end of September.
Vacancy will likely decline over the next 12 months, Delta reported.
11/11/11, Jennifer Dawson, Houston Business Journal