2024 News Archive

The Houston Retail market continues to be the healthiest of Houstona€™s commercial real estate markets. The overall vacancy rate has remained steady quarter to quarter, ranging from 4.8% to 5.1%. Additionally, as of 4Q23, Houston recorded a total absorption of 2.8 million SF over the past 12 months. This absorption was predominantly concentrated in the general retail sector (1.8 million SF) and neighborhood center segment (120,000 SF). Because of this, Houston secured the second position nationally in terms of new demand during this period. As the year progresses, we should see more space being absorbed and demand continue to heighten.

The Houston Industrial market continues to outperform other U.S. markets primarily due to high tenant demand. In 4Q23, the demand for industrial space in Houston increased quickly, reaching 10.2 million SF of transactional leasing activity. This was the highest amount of total space leased in any quarter of 2023, with most of the leases consisting of third-party logistics companies and manufacturers. Furthermore, the market's resilience persists with positive absorption continuing to be a highlight, reaching 4.2 million SF in 4Q23. This trend will more than likely continue throughout 2024, but could be outpaced by supply given the under-construction pipeline.

The Houston office market has experienced mixed trends in recent months, influenced by factors such as the ongoing recovery from the COVID-19 pandemic, shifts in demand for office space, and economic conditions. Despite experiencing negative net absorption in the 3Q23, the market rebounded with positive absorption in both 4Q23 and throughout 2023. The market continues to be shaped by evolving workplace dynamics, including remote working trends and changing tenant preferences. For example, numerous companies have downsized their businesses in recent years, only to realize that they may have cut too deeply. These tenants are now actively seeking additional space and are anticipated to engage in further transactions in 2024. As Houston navigates through the recovery phase, stakeholders in the office market must remain vigilant and adaptable to emerging trends and opportunities.