Quarterly Snapshot

The Houston office market showed signs of recovery in 2Q25, bouncing back from prior slowdowns. Despite a dip in leasing activity, there remains a substantial 73 million SF of available office space, creating both opportunities and challenges for landlords and tenants. With only 2.4 million SF under construction, the market's development pipeline remains constrained because of the upward trend in construction costs. Sublease rates have stabilized, offering a more optimistic outlook as we approach 3Q25. The focus is now on managing older office inventory, as there is a limited new supply on the horizon. The market outlook for 3Q25 is cautiously optimistic, bolstered by improving leasing activity and steady vacancy rates, despite ongoing challenges with older inventory.

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