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Houston Office Market Report | Q2 2025
Rezul News/10707048
HOUSTON - Rezul -- "Houston's office market turned a corner in Q2, posting its first quarterly net absorption gain in a year and pushing year-to-date totals into positive territory.
Although leasing volume softened, construction remains limited and sublease levels have stabilized suggesting an improving market heading into the second half of 2025."
Danny Rice | President
Key Takeaways
Houston Highlights
Houston's office market reported positive absorption for the first time in a year, with 348,414 SF of positive net absorption during the second quarter to finish mid-year 2025 with a positive 286,575 SF. Tenants are continuing the flight-to-quality trend, with Class A properties posting 313,363 SF of net absorption. Leasing volume has slowed from last year, with quarterly activity decreased to 2.2M SF — representing 17.9% of the previous quarter's volume and 47.8% of the same period last year. The overall vacancy rate improved to 27.4% after reporting a record-high 27.9% for the last two quarters and slightly below the 27.5% from a year ago. Construction activity remains limited, although a new building broke ground during the second quarter in the Allen Parkway/Midtown submarket, becoming the fourth building underway in the Houston area. Class A average asking rents decreased to $33.20 PSF, down from last quarter and from $35.54 PSF year over year, while overall gross asking rents reported a marginal increase to $29.00 PSF from last quarter but a decrease from the same period last year.
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Read the full report at colliers.com/houstonresearch
Although leasing volume softened, construction remains limited and sublease levels have stabilized suggesting an improving market heading into the second half of 2025."
Danny Rice | President
Key Takeaways
- Net absorption positive
- Strong activity in Class A
- Flight to quality continues
- Limited construction
Houston Highlights
Houston's office market reported positive absorption for the first time in a year, with 348,414 SF of positive net absorption during the second quarter to finish mid-year 2025 with a positive 286,575 SF. Tenants are continuing the flight-to-quality trend, with Class A properties posting 313,363 SF of net absorption. Leasing volume has slowed from last year, with quarterly activity decreased to 2.2M SF — representing 17.9% of the previous quarter's volume and 47.8% of the same period last year. The overall vacancy rate improved to 27.4% after reporting a record-high 27.9% for the last two quarters and slightly below the 27.5% from a year ago. Construction activity remains limited, although a new building broke ground during the second quarter in the Allen Parkway/Midtown submarket, becoming the fourth building underway in the Houston area. Class A average asking rents decreased to $33.20 PSF, down from last quarter and from $35.54 PSF year over year, while overall gross asking rents reported a marginal increase to $29.00 PSF from last quarter but a decrease from the same period last year.
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Read the full report at colliers.com/houstonresearch
Source: Colliers Houston
Filed Under: Real Estate
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