Office Space News
Houston Office Space Market Suffers
Published July 15th, 2010 by Jennifer LeClaire
Office markets in Dallas and Austin are down, but what about Houston? Call it a Texas Trifecta as vacancy rates in Houston continued to rise in the second quarter of 2010.
According to CB Richard Ellis, office space occupancy declined by 217,524 square feet between April and June. That marks the declines for six quarters in a row. The vacancy rate in Houston is now 16.4 percent.
Still, considering Houston has 190 million square feet of office space, the city is faring well in the grand scheme of the commercial real estate market. One thing that’s working against Houston is the BP Oil Spill in the Gulf of Mexico that has pushed job losses to the oil and gas sector. CB Richard Ellis reports some companies are choosing short-term lease over long-term lease renewals due to the uncertainty.
Like most other office markets, Houston landlords are offering plenty of incentives, from flexible leas terms to low parking to free rent. Overall, rents are dipping there. The market is ripe for serviced office industry players to soak up the glut and woo clients with short-term leases. So let’s take a look at the Houston area serviced office space market. Here are some of the better-known players:
- Tegan Executive Suites
- Yess Executive Suites
- Corporate Office Center
- Abby Office Center
- BusinessSuites
- HQ
- Anchor Executive Center
- Regus
- Tower Executive Suites
- Skyline Executive Suites
- Front Office Business Centers
There’s plenty of competition in the Houston serviced office market. The list is too long to include here. Let’s take a quick look at Tower Executive Suites. They have office space at 16225 Park Ten Boulevard. Their executive office suites range from 100 square feet to 700 square feet. The office rental rate includes a conference hall, telephone answering services, mail service, free parking, free visitor parking, coffee service, utilities and janitorial service.
It’s hard for traditional office landlods to compete in markets like Houston with high vacancy and tenants timid about signing long-term leases. And talk about incentives! Serviced office space takes a turnkey approach that many will find attractive in this economy. I would expect to see this market niche grow in Houston even as traditional office landlords suffer.
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Bill Brookshire July 15th, 2010 at 10:25 am
Wow. I hadn’t thought about the connection between the BP oil spill and office space leasing. Houston has been through a lot. First the hurricane and now the oil spill. Given all this, and given how much office space is in the city, Houston does seem to be doing better than many other metros. I imagine the recover would hasten if BP could get the cap on the well.
Elizabeth Sanchez July 15th, 2010 at 10:50 am
There are a lot of different players in Houston’s serviced office market. I know Regus has several executive suites facilities there. It’s definitely an interesting time to be in the business. I would think customers looking for short-term offfice leases in conjunction with needs related to the BP oil spill would turn to serviced office space.