- Leasing activity increased over the quarter
- Absorption remained negative
- Vacancy continued to increase
- Rental rates decreased
The Woodlands office market vacancy rate increased from 15.3% to 16.8% over the quarter but is still well under the Houston Metro and Houston CBD average vacancy rates of 22.3% and 25.3%, respectively. Construction activity remained steady between quarters and leasing activity increased as COVID restrictions in Texas eased. A large portion of the negative absorption during Q1 can be attributed to Exxon vacating 110,080 SF in 1725 Hughes Landing. Looking ahead, leasing activity will continue to increase and The Woodlands submarket should record some positive absorption by year-end.
Based on a 5-year historical average, the forecast trends to positive net absorption over the year.