Q2 2018 Houston Office Research & Forecast Report

Houston’s office market made progress in the second quarter, posting positive absorption of 84,750 SF. This is a substantial increase from the negative 1.4 million SF of absorption recorded in the first quarter. Talos Energy relocated into 101,072 square feet in 3 Allen Center building in June and Cigna Corp. moved 600 employees into 91,190 square feet of space in the Brookhollow Central One building located at 2800 North Loop West in May. These were the largest relocations during the second quarter of 2018.

Even though the recent data released by the US Bureau of Labor Statistics shows the Houston MSA created 79,200 jobs (not seasonally adjusted) between May 2017 and May 2018, an annual growth rate of 2.6% which is above the national average job growth rate of 1.6%, indicating that Houston’s economy is humming along, many large firms have recently begun downsizing their office space or relocating to smaller footprints. This is proven to be true in the latest report that Occidental Petroleum will vacate close to 800,000 SF of its’ Greenway Plaza submarket space and place it on the sublease market for occupancy in 2020. The company plans to move to a new West Houston building planned on the site of the former ConocoPhillips West campus, according to a recent article in the Houston Business Journal.

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