‘Build, baby, build!’ hits bustling Houston
HOUSTON – Houston is where the action is when it comes to office real estate. The U.S. shale revolution has cause a boom in office demand in the world’s energy capital.
Demand is so hot that Houston is one of the few places where banks will loan money for a new building without developers having a tenant first. “Houston is booming and bar none the strongest market in the United States of America,” said Joseph Sitt, chief executive of Thor Equities.
There are some 56 office buildings totaling at least 11 million sf under construction in and around Houston, according to CBRE.
The Texas economy grew 4.8 percent in 2012, the fastest pace among the big U.S. states. New workers are pouring into Houston, which needs new offices for the 100,000 jobs it added last year. Houston is on track to add another 80,000 this year.
Of the buildings under construction, 29 will be rentals that will not be owner-occupied. Of those, 13 broke ground without signed leases. Six of those have since found tenants.
Vacancy rates in the most expensive, modern office slid to 6.9 percent in second quarter 2013 from 12 percent in the same period two years ago, according to CBRE. The broader office vacancy rate is 14.2 percent versus a national average of 17 percent.