HOUSTON (Marcus & Millichap) – One of the “healthiest employment markets in the country” will keep Houston office properties among the
nation’s strongest performers this year, reports Marcus & Millichap in its third-quarter 2011 office market update.
Among the firm’s projections for Houston for the remainder of 2011:
- The city will add 98,000 jobs this year, an increase of 3.9
percent, the nation’s largest. Last year, the metro gained 45,900
positions, climbing 1.8 percent. Office users will create 17,900 spots,
rising 3.4 percent.
- In 2011, builders will complete major projects that broke ground before
the recession. Developers are expected to bring 1.3 million sf of new
office space to the metro, up from 1.1 million sf last year. Over the
past five years, annual completions averaged 2.6 million sf.
- Thanks to employment gains and below-trend construction, vacancy will fall
to 14.1 percent this year, dipping 100 basis points. In 2010, vacancy
ticked up 20 basis points.
- Asking rents will gain 3.2 percent to $24.55 per sf at year end, while effective
rents climb 4.6 percent to $20.80 per sf. In 2010, asking rents were down
1.1 percent while effective rents fell 1.7 percent.