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LEASING ACTIVITY DECLINES
Following a strong quarter of activity, with 3.6 million square feet (msf) leased – quarterly activity dropped to 3.1 msf. Tenants have leased 11.1 msf in the four most recent quarters, 13.5% below the long-term market average.
CLASS A AVAILABILITY INCREASES
The market’s overall availability rate increased by 10 basis points from 27.6% to 27.7%. The Class A availability rate increased by 50 basis points to 30%.
ASKING RENT NUDGES LOWER
Average asking rent for the entire region decreased by 3% to $27.74; year-on-year, average asking rent decreased 2.8%. The Class A rate fell by 4.3% to $31.81 during the first quarter.
SALES SPIKE
Office property sales during the last six months (through February 2018) totaled $3.7 billion, an impressive 87% increase compared to the previous six–month total of $2.0 billion.
“Global oil markets have slowly reined in the issue of excess supply in the last few quarters. The threat of a glut in production has not been fully put to rest, though. Similarly, Houston is just starting to work through its ample excess availability, putting tenants in the driver's seat. ”
Brad Hauser, Research Director