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Find Houston office space for rent
Houston, with a population of more than 2.3 million, is the seat of Harris County and the largest city in the nation by total area. Houston boasts 212.8 million square feet of total office inventory, making it the sixth-largest office market in the nation. In 2018, Houston had the seventh-highest GDP in the nation at $478.8 billion, trailing only New York, Los Angeles, Chicago, San Francisco, Washington, and Dallas-Ft. Worth. While the energy industry reigns supreme and plays a significant role in dictating economic stability, a large portion of the remaining Houston office space market is occupied by technology, shipping, biomedical research, aeronautics, manufacturing, healthcare, e-commerce, and media companies.
What our brokers say about Houston office space
In Q4 of 2019, the Houston, Texas, office market achieved the most positive net absorption recorded in one quarter in the past two decades. Houston’s office market is typically dominated by changes in the oil and gas industry, and the energy downturn accounted for notable occupancy losses; direct vacancy was just above 20 percent at the end of the year, according to JLL’s office insights. The office market prognosis for Houston looks good, especially because of the addition of new mixed-use developments and the renovation of office buildings. In total, developers added 1.3 million square feet of office space to the City of Houston in 2019, and 3.7 million more square feet are still under construction.
When starting a search for office space in Houston, it’s important to understand what’s available, and the advantages and drawbacks of each type of lease.
Traditional Office Space for Rent in Houston
The majority of businesses operate best in a traditional office space. Look for traditional office properties in the Houston community if your business just wants a place to call home and to customize to align with your brand.
Advantages: Work directly with a landlord, privacy, customizable with a tenant improvement allowance.
Drawbacks: The typical lease commitment is 3-5 years. Limited options for businesses with fewer than 10 employees.
Houston Office Sublet
Smaller and earlier-stage businesses may struggle to find a traditional office location that checks off everything on their list due to size and lease duration commitments. Subleasing office space in Houston might be their best option. Most sublease space is in Class A buildings located in Houston’s top submarkets and is already built-out and furnished.
If you’re a fast-growing company, search for a subleasing opportunity. A sublease involves a less significant commitment than a traditional lease. Also, businesses can lease a larger space and sublease a portion to offset the costs until their team has grown (see office sharing below).
Advantages: You can sublease Class A office space for much less, with more flexibility on lease duration. Spaces are already built out and furnished.
Drawbacks: The previous tenant is your “landlord,” rather than a professional property management firm or landlord, limited employer branding opportunity, can’t make changes to the space to accommodate your needs.
Houston Coworking or Shared Office Space
One significant change in the global and Houston, Texas, commercial real estate markets is the rise of coworking and shared office space. While these options existed long before the recent notable players in the industry, market demand for flexibility and turnkey office setups has skyrocketed. While these options alleviate the mental energy of office maintenance, these are not always the most cost-friendly options. However, for many, coworking space or part of a shared office is an economical option for a business’s first office.
Drawbacks: Lack of privacy, no employer branding, convenience can come at a very steep price.
Houston office space | Lease data & trends
As of Q4 of 2019, Houston housed 169,963,275 square feet of office space with a total vacancy rate of 22.8%. A direct lease of office space in Houston (across the Metro area) costs an average of $31.60 per square foot. Pricing will vary significantly by neighborhood, building class, and lease terms. Also, office sublease prices are generally lower than a direct lease.
In Houston, Class A buildings rent for an average of $36.63 per square foot. Class B office space in Houston rents for an average of $21.90 per square foot. The city contains more than twice as much Class A office space as Class B office space.
Class A Office Space: Class A buildings in Houston are typically the newest, most modern, and most expensive spaces on the market, with a full slate of amenities. As a result, the tenants leasing Class A office space tend to be well-established, industry leaders. Large financial institutions, ad agencies, law firms and tech giants typically occupy Class A spaces. Common amenities include on-site building management and security, lobby attendants, modern HVAC systems, high-end IT infrastructure, and covered parking, to list a few.
Class B Office Space: What you may sacrifice in amenities and flash, you can make up for in price without having to sacrifice on location, accessibility and overall functionality. Class B offices in Houston with reputable landlords and property managers are excellent options for businesses focused on substance over style.
Vacancy Rate: Calculated as the amount of square footage available for lease divided by total square footage in the market or submarket, vacancy rate gives insight into how tight the competition is for space. Tighter competition usually means higher prices and fewer concessions from landlords.