Houston Worst; Dallas First in National Rankings of Office Space Absorption
HOUSTON and DALLAS – Houston has worst office absorption in the nation while Dallas has the best, according to a midyear report by Cushman & Wakefield.
Houston had 1,565,381 million SF of negative net absorption in the first half of 2017, meaning a lot more office space became vacant as Houston energy companies continued to shrink.
Meanwhile, Dallas/Fort Worth had 3 million SF of positive absorption in the first six months of the year. J.C. Penney, Brinker International and Goldman Sachs occupied huge blocks of space this year.
The Cushman & Wakefield research covered 87 markets around the nation.
Showing steady improvement for several consecutive years, the Dallas market had an overall vacancy rate of 16 percent in the second quarter of 2017, Cushman & Wakefield reported. Six years ago, in the second quarter of 2011, the overall vacancy rate was 22 percent.
“We continue to see companies opting to either relocate or concentrate their growth efforts in North Texas often in lieu of expansion in other markets. Companies continue to take advantage of the business attributes of the region, including our strong labor base and business-oriented policies,” said Craig Wilson, executive managing director of Cushman & Wakefield.
Dallas leasing activity for the first six months of 2017 totals about 6.3 million SF.
“In most circumstances, there is strong leasing activity in newly constructed buildings, particularly in the most active markets such as Uptown and the West Plano/Frisco markets,” Wilson said.
The Houston market struggles against an oversupply of office space. More than 11 million SF of sublease space is on the market, a slight improvement over last year, but much worse than normal. The vacancy rate is above 20 percent.
