Houston, TX

STRONG 2008 FORECAST FOR HOUSTON’S OFFICE & INDUSTRIAL REAL ESTATE MARKETS 

Houston, TX, April 22, 2008 – Houston’s office and industrial commercial real estate markets closed the first quarter with optimal conditions for a strong performance in 2008, according to Colliers International’s First Quarter 2008 Office and Industrial Overviews released today. Limited available space, strong tenant demand and an expanding employment base suggest the local commercial real estate sector will once again stand in sharp contrast to a softening national market expected this year. Driving the local market’s gains is Houston’s above-average job growth, with revised employment numbers showing the MSA gained an impressive 90,200 jobs in 2007 representing a 3.6 percent annual growth rate. This marks the third consecutive year the Houston MSA’s job growth rate surpassed both Texas and the U.S. An expanding energy sector – with oil prices at $109 per barrel and natural gas trading above $10 per MMBtu in March 2008 – bode well for ongoing healthy employment gains. Overall, economists are expecting Houston will continue to outperform the slowing national economy in 2008.

Colliers International’s office market report for Houston cites the ongoing flight-to-quality trend benefiting Class A office space properties citywide, with the Central Business District (CBD) leading the market and Class A average quoted gross rental rates downtown increasing $10.81 per square foot or 39 percent to $38.41 per square foot on a year-over-year basis. By comparison, Houston’s suburban Class A average quoted rental rates at $27.33 per square foot increased $3.62 per square foot or 15 percent during the same period.

Robert S. Parsley, Co-Chairman and Principal of the Houston office of Colliers International stated, “Houston’s office market is undergoing a dramatic shift with 8.9 million square feet of new office space under construction in the first quarter 2008, compared to 2.6 million square feet underway at the end of 2007. Of the projects currently in the pipeline, a total of 28 buildings exceed 100,000 square feet, with the six largest located in the Energy Corridor and the CBD, two areas that have seen a sharp increase in tenant demand for office space. Other key submarkets performing quite well are the Northwest, Westchase and Sugar Land office submarkets.”

Houston’s industrial sector is also experiencing record strong development activity at the start of 2008 with a total of 6.2 million square feet underway at the end of the first quarter.

Michael J. Taetz, Principal and Director of Colliers' Industrial Division, stated, “Houston’s industrial market is benefiting from the growing presence of national developers new to the area heating up construction activity. Driving this dynamic growth are strong market fundamentals, highlighted by single-digit vacancy for all major submarkets, which in turn are supported by a solid economic base of future-growth industries. Among these are a strong local manufacturing sector comprised primarily of companies servicing the expanding energy and chemicals industries, and an import/export trading sector experiencing a dramatic increase in both air cargo and shipped container activity.”

“It’s no surprise that three key industrial corridors long known as Houston’s leading distribution hubs – the Southeast (Port of Houston), North (Bush Intercontinental Airport), and Northwest – together account for almost 95% of the total industrial space under construction citywide,” Taetz added.

In addition to significant construction underway, Colliers International’s Houston market reports also cite healthy leasing activity for both the office and industrial sectors in the first quarter which is expected to boost absorption gains in the second half of 2008.

View 2008 1Q Houston Office Market Report 

View 2008 1Q Houston Industrial Market Report 

Veiw All Houston Market Reports 

About Colliers International

Colliers International is a global affiliate of independently owned and operated commercial real estate firms. The organization’s 10,171 employees span the world in approximately 267 offices in 57 countries. On a worldwide basis, Colliers manages 672.9 million square feet, with 2006 transactions valued at $63.5 billion and revenue in excess of $1.6 billion.

For 50 years, Colliers International has provided real estate solutions to many of Houston’s leading corporations, institutions, and small businesses, making us the longest-standing full-service firm in the Greater Houston area. Our services include owner and tenant representation in leasing, acquisition, sale and financing for office, industrial, retail, investment, medical, and mixed use development and land.

Contact Information

 back to top