Houston office market report

Houston’s economy continues to demonstrate strength, with 56,500 jobs created over the past 12 months. Furthermore, the unemployment rate in the Bayou City remains relatively low at 4.1%. Office-using sectors have experienced significant growth, with nearly 8% more jobs since its pre-pandemic peak. Yet, this robust job creation hasn’t directly correlated into a surge in office space demand, likely due to evolving office layouts and companies becoming more efficient with their footprints. 

The Houston office market is experiencing a bifurcated recovery, with trophy and class A+ properties leading the way. The flight-to-quality trend, driven by companies seeking to attract and retain top talent in premium spaces, is further exacerbating the divide in the market. With limited new construction underway, these top-tier spaces could potentially begin commanding higher rents and providing fewer concessions. As a result, future demand will likely begin to shift towards the next tier of buildings that are well maintained and have undergone renovations over the past decade, offering a more cost-effective alternative.