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Houston's office market is beginning to stabilize after several difficult years, with positive net absorption reaching a 10-year high and vacancy declining from its 2025 peak. The market-wide vacancy rate now sits at 19.9%, but newer office buildings are performing significantly better, highlighting a strong "flight to quality" trend. Demand is concentrated in high-end, amenitized buildings located in strong submarkets such as Katy Freeway East, The Woodlands, and parts of the CBD. While recovery is uneven and older commodity office buildings still struggle with elevated vacancy, the market appears to have reached an inflection point as previously vacant space begins to backfill and supply pressures remain limited

Houston's office market continued to reflect a tenant-favorable environment in 4Q25, with the overall vacancy rate elevated to 19.6% even as it declined slightly quarter-over-quarter. Leasing activity remained selective, with absorption positive but modest compared with historical norms, and overall performance characterized by a continued flight to quality, as tenants favored newer, amenitized space. Asking rents held steady near record levels, roughly around $30/SF NNN, supported by demand in prime assets, although effective rents were tempered by concessions in older buildings. These dynamics underscore a market that is gradually stabilizing but still navigating the impacts of structural change and elevated availability.

Houston's office market remained one of the nation's strongest in 3Q25, ranking among only three major U.S. metros with positive absorption year-to-date. Construction activity is limited, with just 2.3 million SF underway, about 80% preleased, primarily for build-to-suit and medical office projects in north and west Houston. This lack of new supply is helping stabilize fundamentals, keeping vacancy near 19.8% and average asking rents above $30 pSF. With few groundbreakings and steady demand for high-quality space, Houston's office sector is positioned for continued gradual improvement into 2026.