The Woodlands | Office Market Report | Q3 2023

HOUSTON - Nov. 17, 2023 - PRLog -- Key Takeaways

• Vacancy up QoQ, but down 130 bps YoY
• Average rental rates rise
• Net absorption turns negative, remains positive YTD
• Construction levels low
• Leasing activity slows QoQ

Highlights

The Woodlands office submarket's vacancy rate increased 40 basis points to 14.4% from 14.0% in Q2 2023, but it is still below the vacancy rate for both the Central Business District and the Greater Houston Area. Average asking rental rates have increased the last two quarters, currently at $30.18 per square foot from $29.82 in the second quarter. The average Class A rental rate rose slightly to $35.68 per square foot from $35.56 in Q2 2023. Net absorption registered a loss for the first time since Q2 2021 with a negative absorption of 62,753 square feet, but year-to-date is a positive 224,643 square feet. Leasing activity also slowed this quarter after notable activity the prior quarter, with the second-quarter activity accounting for more than 68% of the 827,000 square feet leased year-to-date. No buildings delivered during the last two quarters, but two buildings are under construction.

Market Fundamentals

Several firms in The Woodlands including Waste Connections and Western Midstream have renewed and expanded their office spaces during third quarter.

Vacancy increased slightly during the current quarter after falling each consecutive quarter since the end of 2021, while net absorption also turned negative after five quarters of positive absorption.

See the full report here: https://www.colliers.com/en/research/houston/q3-2023-the-...