Houston office space market

Houston’s Office Space Market: 2024 Snapshot into the Current Landscape

The air hangs heavy with uncertainty in the Houston office space market. Once a bustling hub fueled by oil and gas giants, the landscape is shifting, leaving many wondering: is this a temporary dip or a sign of things to come? Let’s delve deeper into the current state of Houston’s office space market, exploring both the challenges and the glimmers of hope.

Houston’s Office Space Vacancy Blues:

Like a half-empty dance floor, the vacancy rate currently sits at a daunting 22.5%, significantly higher than the national average. This can be attributed to a domino effect: the oil and gas downturn triggered an exodus of companies, leaving behind empty spaces. The rise of remote work further complicated matters, with some opting for flexible arrangements instead of dedicated desks. Additionally, an overzealous construction spree pre-pandemic resulted in an oversupply that the current demand simply can’t fill.

Rents Feeling the Pinch:

With more space available than takers, rental rates naturally take a hit. Negative net absorption, meaning more space is being vacated than occupied, adds to the downward pressure. While this might sound like bad news for landlords, it could be a silver lining for companies looking to relocate or expand, offering them leverage in negotiations.

Determining the “best” Houston office sub-market depends on your priorities and needs. However, I can share some insights based on recent market reports and trends:

Top Houston’s Office Space performers in terms of leasing activity:

Energy Corridor:

As of Q3 2023, this sub-market led the pack with 37.8% of the leasing volume for spaces larger than 10,000 square feet. This is likely due to the continued presence of energy companies and the sub market’s proximity to major highways.

The Woodlands:

This northern suburb attracted 12% of leasing activity, thanks to its growing population, high quality of life, and mix of office space options.

West Loop:

Another popular choice with 12% of leasing activity, the West Loop offers a trendy location, easy access to downtown, and a mix of established and new developments.

CBD (Central Business District):

Despite lower overall leasing activity, the CBD remains a desirable option for its central location, access to amenities, and concentration of professional services firms.

Sub-markets worth considering based on other factors:


If prestige and a high concentration of Class A space are your priorities, the Galleria is a top contender. It boasts excellent retail options and a vibrant atmosphere.


Situated between the Energy Corridor and Galleria, Westchase offers potentially lower rental rates and good overall value.

Inner Loop:

For companies seeking walkable access to amenities and a vibrant urban environment, the Inner Loop neighborhoods like Midtown and Montrose hold appeal.

It’s important to consider the following factors when choosing a sub-market:

Your industry and target audience: Some sub-markets may have a higher concentration of companies in your field, facilitating networking and attracting talent.

Commute times for your employees:

Consider their needs and proximity to public transportation or major highways.


Rental rates can vary significantly across sub-markets.

Here’s a general overview of average rental rates in different sub-markets as of Q3 2023:

  •     Central Business District (CBD): $42 per square foot per year
  •     Energy Corridor: $38 per square foot per year
  •     The Woodlands: $32 per square foot per year
  •     West Loop: $31 per square foot per year
  •     Galleria: $30 per square foot per year
  •     Inner Loop: $28 per square foot per year

Amenities and desired atmosphere:

Do you need access to specific amenities or prefer a bustling downtown environment or a quieter suburban setting?

Leasing Limbo:

The cautious tango continues, with leasing activity resembling a hesitant sway. Companies, unsure of their future space needs in this evolving work landscape, are taking a wait-and-see approach. This creates a stagnant market, but also prevents a free-fall, leaving room for potential upticks.

But Wait, There’s More: Not all is lost in the Bayou City. Houston’s economy boasts impressive job growth, particularly in sectors like healthcare, technology, and professional services. This influx of jobs could translate into future demand for office space, filling those currently echoing voids. Additionally, the limited new construction underway suggests a slowdown in adding to the existing glut, potentially stabilizing vacancy rates in the long run.

Affordability Advantage:

Compared to its pricier counterparts on the national stage, Houston shines with its relatively affordable rents. This could be a game-changer for companies seeking cost-effective expansion opportunities, making Houston an attractive contender in the competition for their business.

The Verdict:

Houston’s office space market is at a crossroads. While challenges like high vacancy rates and sluggish leasing activity persist, there are positive signs that shouldn’t be ignored. The city’s economic growth, coupled with its affordability, paints a hopeful picture for the future. Whether it’s a full-blown boom or a measured ascent, one thing’s for sure: Houston’s office space market is a story worth watching, with new chapters unfolding as we speak.

Stay tuned for further updates as the plot thickens in Houston’s dynamic office space market. And remember, if you’re a company considering a move or expansion, Houston might just be the hidden gem you’ve been searching for! Contact one of our local pros for more details about the Houston Office Space market.

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