Markets & Economy

Two of Houston’s real estate sectors are bracing for increases in vacancy

Volume of new project deliveries to impact both sectors
  • Energy companies are vacating a significant amount of office space.
  • Twenty-two office projects and 98 multifamily developments are underway in Houston.
  • The Inner Loop will be heavily impacted by multifamily deliveries this year.

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Houston's office and multifamily markets are in for a difficult year, as vacancy rates in both real estate sectors are expected to noticeably increase. Entering this year the city's overall office vacancy rate stood at 17.6 percent. Brandon Clarke, senior vice president of CBRE Houston, expects that rate to reach more than 21 percent this year, according to a Realty News Report article. The primary reasons for the projected increase in vacancy rates: energy companies vacating space and the volume of new office space slated to be delivered. In downtown Houston, Shell Oil Co. recently put 350,000 square feet of office space onto the sublease market. Additionally, Exxon Mobil recently vacated roughly 2 million square feet of office space. According to a CBRE fourth quarter report, Houston leads the state in office construction, with 7.4 million feet underway spread among 22 projects. Last year, 11.3 million square feet of new office space was delivered, the highest level o...