HOUSTON (Grubb & Ellis) – According to Grubb & Ellis’ fourth quarter 2010 Houston office trends report, the Bayou City’s office leasing market ended 2010 on a positive note with 551,655 sf of net absorption, pushing the year-end growth total back into positive territory at 92,652 sf.
The report called this “an encouraging sign heading into 2011 that companies are starting to ramp back up and take advantage of reduced rents and attractive concessions offered by landlords.”
In addition, the report forecasts:
- Many of the recent lease signings will not immediately counter the run-up in vacancy as most of the larger tenants will not occupy their space until the second half of 2011 and into 2012.
- Asking and effective rental rates are expected to start stabilizing sometime early to mid-year 2011.
- Houston’s office investment market will see an uptick in transaction volume with continued resurgence of lender activities and allocations for new loans, interest rates at or near all-time lows and the buy-sell gap narrowing.
- The office market appears to have already reached bottom as many submarkets have started to see an uptick in leasing activity, but a quick bounce-back is unlikely with modest job growth expected in 2011.