Houston has, for the most part, survived the oil downturn, but some areas are still in recovery.
Though Houston’s commercial real estate market is doing well overall, the office sector is still struggling with high vacancy rates.
Eli Gilbert, director of research at commercial real estate firm JLL in Houston, said this has to do with oversupply and jobs lost during the downturn.
Also, companies have learned to be more efficient with less space.
“Looking at the overall vacancy rate,” he said, “particularly in the office market, in the future, a higher value than has historically been seen may become the new normal for the region.”
The office vacancy rate is currently around 20%, with estimates placing the amount of vacant office space between 50 and 60 million square feet, according to the Greater Houston Partnership’s 2019 Employment Forecast.
Gilbert said population growth is the main driver for the other commercial real estate sectors, which include industrial, retail and multi-family.
The industrial market, in particular, is benefiting from an increase in online sales and demand for distribution centers.
