Houston office market 'continues to struggle' amid pandemic

The office market industry in Houston continues to struggle as the COVID-19 pandemic continues to impact the economy.

Avison Young recently released its third quarter 2021 office market report for Houston, showing leasing activity decreased by 38.3% when compared with long-term historical averages.

“The office sector continues to struggle,” said Rand Stephens, principal and managing director of the firm’s Houston office. “The highest-quality office buildings have done the best in this downturn which bodes well for new construction and those older buildings that can be successfully renovated and updated.”

According to the report, Houston ranks fourth highest in office visitor volume recovery compared to March 2020. But office activity levels have fallen 72.2% since 2019. The flight-to-quality trend persists, with the class-A and trophy segment accounting for 61.7% of all leasing activity during the last two years.

Leasing activity has shown mild but positive signs of recovery in 2021, increasing from 2.2 million square feet to 2.5 million square feet in both Q2 and Q3 following a slow first quarter.