High Expectations: Office Prospects Pursue Quality in Recovering Market

If there’s one thing to take away from Brandi Sikes’ analysis of the Houston office market, it’s that recovery may be slow, but the market is recovering.

“Based on what we know today, the worst is behind us,” says the Principal & Senior Advisor for SVN J. Beard Real Estate – Greater Houston, who merged Limestone Commercial Real Estate in November 2021.

Negative absorption peaked in Q3 2020 and leasing activity began to increase in Q2 2021, Sikes adds, noting Houston just posted its first quarter of positive absorption.

“Houston has one of the highest vacancy rates in the nation – 25 percent,” says Sikes. “Class A availability is closer to 30 percent, but the flight-to-quality offices with abundant amenities will help mitigate this vacancy over time.”

The demand for quality by prospective tenants almost assuredly requires buildings to offer amenities to remain competitive, she says.

“Tenants have high expectations when it comes to incentives but learn quickly that not all buildings are created equal,” Sikes points out. Stabilized assets can hold out for better deals in better days while the less fortunate are opting to ‘buy’ tenants on a short-term lease in hope of making it up on the renewal.” Click to read more at www.rednews.com.