Data continues to confirm the flight-to-quality trend, as higher-quality office space dominates demand.

An analysis of activity during the eleven months of the year—November 2022 compared to November 2021.

Houston office vacancy at 25.1%

Eleven months into 2022, overall vacancy is at 25.1%, up 20 basis points from last year’s 24.9%. Availability is 30.1%, up 130 basis points from November 2021 at 28.8%. The difference between this figure and the vacancy rate reflects expected future move-outs. The Houston office market has recorded 13.1 million sq. ft. of leasing activity comprised of both new leases and renewals, almost unchanged from this time last year. Net absorption (move-ins minus move-outs) is at positive 139,495 sq. ft., up significantly from negative 2.3 million sq. ft. year-over-year. In addition, the amount of construction is at 3.4 million sq. ft., with 2 million sq. ft. or 57% of the space in the medical center submarket.

Large office leases in 2022

Energy firm EOG Resources renewed its 374,000 sq. ft. downtown lease in Heritage Plaza’s 52-story office tower at 1111 Bagby Street; pipeline company Enbridge signed a 14-year sublease for 290,025 sq.-ft. at Energy Center V in the Energy Corridor; and engineering company Bechtel signed a 205,000 sq.-ft. lease in CityWestPlace campus in Building 3 in the Westchase submarket.

WTI above $80 per barrel as U.S. rig count increased by two

As of December 1, trading close, West Texas Intermediate (WTI) crude for January delivery settled at $81.22 per barrel, up 67 cents, or 0.8%, on the day. Meanwhile, the U.S. Rig Count is at a current level of 784 as of November 23, up from 782 last week and up from 563 one year ago. According to oil field services company Baker Hughes, this is a change of 0.26% from last week and 39% from one year ago. In addition, the Federal Reserve confirmed that smaller interest rate increases are likely ahead and could start in December.

Leta Wauson
Director of Research
[email protected]
tel 713 275 9618