As we close out another year, it’s time to look back at Houston’s commercial real estate market. Though this past year has been quite a ride, the market is slowly improving. Let’s look at some of the key points from this past year.
The Office Leasing Market in Houston
Houston’s office leasing market has experienced many ups and downs in the past few years and is now primed for a rebound. This is excellent news for Houston commercial real estate, and market analysts are beginning to see the light at the end of the tunnel.
With all these factors being weighed up, it’s clear that Houston will be firmly on the upswing when it comes to office leasing for the year ahead. There is an increasing trend of employees returning to the workplace, which will help the Houston office market stabilize. As tenant requirements rise again and demand in other segments, such as hospitality, begins to catch up with its pre-pandemic levels, the office leasing market should benefit.
Houston’s young, diverse, and fast-growing population offers attractive options, especially for corporations. Houston has pocket-friendly rentals, a large commercial real estate inventory, and a favorable business location. It provides several tax incentives to entice professionals to relocate to Houston.
Houston is also an excellent option for companies looking to cut back on expensive commercial lease space and move away from unfavorable state and local government regulations.
Houston’s Industrial Sector
The past couple of years have seen businesses shut down and significant layoffs occurring worldwide. However, the industrial sector has managed to remain successful throughout it all. In fact, not only have industrial businesses continued to operate and grow during this time but so have commercial real estate markets like Houston’s.
Since the first quarter of 2022, the amount of industrial real estate under construction in the Greater Houston area has increased. As Houston’s industrial market sees significant expansion activity, the building and spaces under construction are being pre-leased at higher rates than before.
Large retailers are looking to occupy more distribution centers and warehouses to accommodate consumer demands quickly. As demand overtakes supply, there is a continued increase in rental prices. This trend is expected to continue for the next one or two years. (Offices.net, 2022)
The demand for industrial space in Houston is leading to an expansion of the sector. According to Crexi, Amazon has leased 3.6 million SF in new development and nearly 18.5 million SF of build-to-suit and spec industrial products currently under construction in the Houston metropolitan area. (Ryle, 2022)
The industrial sector will remain successful for some time to come. Industrial buildings are also becoming increasingly specialized to provide companies with better storage and transportation solutions. So if you are looking for an area of safe investment, then Houston commercial real estate is something you should consider.
Houston’s Retail Space Market
The retail landscape is constantly evolving, and there is no doubt that e-commerce has had a significant impact. In the era of Amazon, traditional brick-and-mortar stores have struggled to compete as more shoppers turn to online retailers for their goods and services.
Unlike some other states, in Houston, retail is assuredly on the upswing. Houston topped the country for the most retail space under construction. It also featured among the U.S. top 5 for inventory size. (Offices.net, 2022)
The Outlook for Houston’s Commercial Real Estate Market
The outlook for Houston’s commercial real estate market is looking promising. The prospect of job growth in Houston seems good, and the Houston office market has shown some positive signs of recovery.
The recovery in the energy sector has also resulted in increased job prospects for Houstonians, meaning there will be more potential tenants available. Due to the current occupier-friendly market conditions, leasing volume has increased activity as many office tenants are signing contracts ahead of their lease deadlines.
Have You Considered Tenant Representation?
Finding the most suitable office space can take time and effort for businesses. This is where tenant representation can be a game changer.
Tenant representation is a service that helps tenants find and lease commercial real estate. Our Tenant Reps will handle all the paperwork, logistics, and communication with the landlord. With their vast experience in experience in negotiating lease terms, Oliver CRE tenant reps can also save you time and money so that you can focus on running your business.
Oliver CRE Tenant Reps have valuable inside knowledge of the real estate market. They can help you define your needs to find the most well-suited potential spaces for the needs of your business.
What Oliver Commercial Real Estate Offers You
At Oliver Commercial Real Estate, Tenant Representation is one of our featured services. We’re committed to finding and closing the best commercial properties for you.
Our commercial spaces are in convenient and accessible areas of Houston, from the Houston Ship Channel to The Woodlands. Our team of locally qualified agents and property managers will analyze your needs. This helps us deliver the best possible solution for your commercial real estate needs.
In addition to Tenant Representation, we also provide the following:
- Commercial/Industrial Space Brokerage – mixed-used offices, and warehouse spaces
- Property Management
- Construction services for renovation and build-outs
Feel free to contact Oliver CRE at (281) 558-1111 to schedule an appointment.
Works Cited
Ryle, Shanti. “The Houston Commercial Real Estate Market.” Crexi Insights, 23 Aug. 2022,
www.crexi.com/insights/the-houston-commercial-real-estate-market.
Offices.net. “Mid-2022 Houston Commercial Real Estate Market Report.” Office News RSS, 1 Sept. 2022,
offices.net/news/mid-2022-houston-commercial-real-estate-market-report/.
