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Market Report

Houston Office Market Report

2Q 2023

Ongoing Economic Diversification and Ability to
Accommodate Expansions Help Diffuse Headwinds

Houston leads the country in net absorption thus far in 2023. The metro entered the global health crisis with the highest vacancy rate in the nation, but has outperformed many alternative markets since that point. From year-end 2019 through the first quarter of this year, Houston’s 290-basis-point vacancy rise was smaller than at least 30 major U.S. markets, including the three others in Texas. This comparative momentum was visible during the opening quarter of this year. From January through March 2023, net absorption in Houston surpassed 1.5 million square feet, the metro’s largest quarterly total since late 2017 and a figure that topped every other major U.S. market during that interval. Leasing activity in the Energy Corridor, Sugar Land area suburbs and Downtown piloted this performance, with the Woodlands and South Main-Medical Center also noting strong net absorption. New move-ins came from a variety of industries, such as energy, engineering, construction and healthcare. 

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