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 Q1 of 2021, the Houston, Texas, office market had a record-high total vacancy rate at just over 26% due to the COVID-19 pandemic. Still, with the state reopening and pandemic recovery, the prognosis for Houston commercial real estate is looking upward as businesses continue to search for and re-occupy office space. Construction on 70,000 square feet of new commercial space in Houston had been completed by the end of Q1 2021, with more than 3 million square feet of space in the process of development.
Houston’s office market is typically dominated by changes in the oil and gas industry, but the economy is rapidly diversifying, with a growing tech industry.
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.
Advantages: Offset office infrastructure costs (office management, cleaning, receptionist, coffee, wifi, etc.), lease flexibility.
Drawbacks: Lack of privacy, no employer branding, convenience can come at a very steep price.
How do I find good office space in Houston for my company?
Looking for the perfect Houston office space for your company? Here’s how you can do so:
- Go into your search knowing your desired lease term and knowing how much space you’ll need. A few factors to consider are:
- Is your company growing? How big is your company now, and how big do you expect it to be in 6 months? A year? 5 years? This will determine whether you should opt for a flexible office lease, such as coworking or a sublease, or whether you should go for traditional space.
- How many of your employees are on-site vs. remote?
- What kind of layout do you need?
- List your non-negotiables for your office space. For example, do you need reception space to receive clients? Is there a certain neighborhood you need to be in, like Galleria or Downtown? Is there a certain price you’re not willing to pay for your office? This will ensure that you find your ideal space sooner.
- Work with a Houston-based tenant broker. There are many particulars when it comes to finding commercial real estate in Houston, so it’s best to work with someone who has a robust understanding of the market. By working with a tenant broker, you’ll ensure that you will have access to the best possible spaces in Houston, no matter what your requirements are. They can also help you negotiate rent and concessions.
Houston office space | Lease data & trends
Renting office space in Houston cost an average of $31 per square foot per year in Q1 of 2021, according to JLL. The cost of renting Houston office space in the city’s central business district was higher at an average of $40.25 per square foot. Leasing office space in Energy Corridor and nearer to suburban areas is more affordable at around $28 per square foot.
In Q1 of 2021, Houston Class A space cost an average of just over $35 per square foot per year to rent, while Class B space cost an average of about $23.30 to rent. Learn more about the differences between Class A and B 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.
Inventory: The total amount of square footage the market or submarket offers.
Houston Office Space for Rent | Average Cost per Square Foot
|Houston office space for rent||Average Asking Rent PSF|
Getting around: Transportation in Houston
Houston, Texas, locals love to drive, and 90% of the workforce commutes by car. Three loop highways encircle the city: Beltway 8, State Highway 99, and Interstate 610. To avoid intense traffic on the Loop or the Sam Houston Tollway, many Houstonians live and work in the same neighborhood or live within a 30-minute drive to work. Nearly 50 car shares operate within Houston, and taking a taxi anywhere within the CBD only costs a $6 flat fare. Metered parking is available on most downtown streets.
Houston’s METRO has 28 Park & Ride lots throughout the city that provide a convenient connection to over 50 bus lines as well as the Red, Green, and Purple light-rail lines. Expansion and improvement of the light-rail system are METRO’s primary goals.
Walkers and bikers will find they have an easy time getting around Downtown Houston. In addition to greenery-filled streets, Houston has an underground system of tunnels that spans six miles and connects 95 city blocks. The tunnels house everything from banks to dry cleaners, as well as plenty of shops and restaurants. The tunnels also make it easy for the downtown office population to avoid the summer heat. Back above ground, Houston has a bicycle sharing system called Houston B-Cycle.
Houston has two major airports that make flying in and out of the city a breeze for frequent business flyers. The George Bush Intercontinental Airport (IAH) is one of the country’s busiest international airports and is located to the north of Downtown Houston. The William Hobby Airport lies to the southwest.
Popular Houston submarkets
Port of Houston
Searching for the perfect commercial space can be hard for business owners. It is one of the biggest expenses that companies can’t avoid. However, an office location in the Port of Houston could be the solution, and our Houston brokerage team here at SquareFoot can help you navigate the market.
Located along the 52-mile-long Houston Ship Channel, the Greater Port of Houston (also called Port Houston) runs along both the north and south banks of Buffalo Bayou and boasts nearly 200 public and private facilities. The Port industrial complex is a huge driver of economic development in East Texas, bringing 1.35 million jobs to Texas and responsible for 20% of the state’s GDP.
Port of Houston Office Space for Rent
Regulated by the Port Authority, Port of Houston is now the largest port on the Gulf Coast, and the sustained presence of its major trade lanes has aided Houston’s development. It is the #1 U.S. port for foreign waterborne freight, with 202 million metric tons, and also the top U.S. port in petroleum, steel and project cargo.
More than 247 million tons of cargo move through the port each year and link the city to the global market. Ease of access to transportation networks and infrastructures—by highway, rail, and air freight—make it well connected to inland destinations as well.
If Port of Houston office space is the location for you, consider these factors when it comes to finding an office rental in Port of Houston:
● Budget: Some rental properties offer flexibility when it comes to payment terms. Nevertheless, be sure to take into account other financial expenses that you as a renter may shoulder, such as system repair and maintenance.
● Accessibility: Nearby amenities can directly affect the business’ visibility for its customers. If you want to draw people to your property, be sure to choose an area that has foot traffic and is closer to the financial district.
● Security and Privacy: Small business owners may opt for shared office spaces. Check the privacy and security services within the rental property as a preventive measure before you sign the lease.
● Local laws: Houston remains the only city in the U.S. without zoning laws, but further property development should still adhere to ordinance codes. Be sure to review and discuss company growth and potential expansion before signing a long-term agreement.
Port of Houston Office Space for Rent – Lease Data & Trends
Houston’s growing population of over 2 million people makes it a perfect place for start-up companies and growing businesses.
One of the advantages of being in the Port of Houston is that it is within reach of 152+ million consumers within a 1000-mile radius, providing a wide range of potential clients for your company. Overall, Houston also ranks as one of the top cities in America with the lowest cost of living, which means you can attract a larger market as well as appeal to potential employees.
The port’s regular transactions contribute a lot to Houston’s business climate and economy as well as to the state and national economy. Port operations are also available to the public via free public boat tours on the M/V Sam Houston, so a lot of people tend to stay longer in the area because of these highly popular tours.
The COVID-19 pandemic disrupted regular working conditions, resulting in higher rental property vacancies. Total vacancy rates rose to 25.1% by Q1 2021 after companies evacuated unused office spaces. However, it is also worth noting that businesses in Texas are now returning to work at full capacity.
Meanwhile, the Houston Industrial Market Report for Q4 2020 noted significant new business occupancy in the Port of Houston submarket, with a new lease of 784,000 SF to Dunavant Distribution Group at Bay Area Business Park near the Port. Prologis, National Property Holdings and Crow Holdings Industrial are among those tenants in the “very active leasing” market showing promise for 2021.
The Port of Houston is responsible for generating more than 3 million jobs nationwide. The continuous business opportunities it provides also have a massive economic impact around the U.S. Current trends and new working arrangements might have affected the commercial real estate rental market, but the port remains a good location for all types of business.
Commercial renters can still take advantage of the somewhat lowered demand and higher supply situation. Landlords may still be likely to lease at competitive rates, as the Q1 2021 reports are still showing lowered asking prices and rents across the city. You can expect to pay an average of $20 per SF per year in the Port Houston corridor.
Whether you’re looking for only a small office for a startup or a larger multi-office property, be sure to get in touch with our team at SquareFoot for real estate and leasing assistance.
The Downtown Houston district covers just under two square miles but is home to the city’s best-known attractions and entertainment hubs, such as the Theater District, Minute Maid Park, Toyota Center, Discovery Green, and Market Square Park. Companies in the energy sector will find themselves working alongside the corporate offices of Shell Oil Co., Calpine, Dynegy, and Total Petrochemicals USA. Downtown Houston is also the city’s civic center, so companies seeking proximity to City Hall and the courthouses should check out Houston office space. Six major freeways lead to Downtown Houston, and there are plenty of public transportation options as well. Rent Downtown Houston office space for an average of just under $43.50 per square foot.
Businesses looking for space near Downtown Houston without quite as much hustle and bustle may be interested in Montrose, an offbeat neighborhood known for its eclectic culture, varied dining options, murals, and exciting architecture.
Directly southwest of Houston CBD, Midtown Houston presents a favorable community for legal, insurance, and real estate offices as well as software developers and companies in the Technology, Advertising, Media, and Information sectors. A growing number of co-working spaces in Midtown have made the neighborhood increasingly attractive to entrepreneurs and startups. The METRO Red Line has three stops along Midtown’s Main Street, and 30 bus routes serve the area. Office space in Midtown rents for just over $29 per square foot.
Houston Galleria is a mixed-use urban development centered around the upscale shopping mall of the same name, The Galleria. The Galleria contains three main office buildings: the Galleria Financial Center, Post Oak Tower, and the Galleria Tower. In total, the neighborhood houses just over 22.7 million square feet of office space. Financial institutions such as Citigroup Merrill Lynch have office space in the Financial Center, as well as many law offices, financial services companies, and energy trading companies. Get to Galleria via West Loop South, or take a bus or the Green Line. Rent office space in Galleria for just under $36.25 per square foot.
Houston Heights is a suburb in Harris County northwest of Downtown Houston known for its boutiques, mom and pop shops, unique architecture, and quaint community character. At slightly less than $24 per square foot, local office space leases for nearly 25% below the citywide average.
The Energy Corridor is a business district that’s known for its energy industry. Houston’s Energy Corridor includes Katy Freeway West, Katy Freeway East, and Westchase. Prominent companies with office space in the Energy Corridor include Citgo, Dow Chemical, BP, ExxonMobil, and Foster Wheeler. Legal and financial services are also standard commercial tenants in the area. Aside from the Katy Freeway, other expressways that reach the Energy Corridor include the Loop, the Northwest Freeway, and Sam Houston Tollway. METRO bus line 75 is known as the Energy Corridor Connector, and many public transit options are available at the nearby Addicks Park & Ride. Rent office space in Energy Corridor for just over $30 per square foot. The Westchase area of Energy Corridor offers slightly cheaper office spaces at $28.25 per square foot on average.
Greenway Plaza is a mixed-use development located in the Inner Loop of Houston, approximately five miles west of the CBD. Considered one of Houston’s largest business districts with nearly 10 million square feet of office space, Greenway Plaza is home to major commercial tenants including various petroleum distribution and energy companies along with insurance, investment management, and software and data services. The exit to Greenway Plaza is off of main highway I-69. A handful of bus lines service the area, and connections to the Red Line and Purple Line cover a portion of the commute. Greenway office space rents for approximately $34.50 per square foot.
Texas Medical Center
The Texas Medical Center (TMC) in Houston is the most extensive medical center in the world and employs over 100,000 people. Within the Texas Medical Center are 21 hospitals, eight academic institutions, a startup accelerator, and close to 50 other related organizations. Office space surrounding the Medical Center neighborhood is ideal for life sciences and medical technology companies. Located three miles south of Downtown Houston near the intersection of the South Freeway and the Old Spanish Trail, it takes less than 15 minutes to drive to TMC with light traffic. The Red Line and multiple buses go to TMC, and the campus has its own privately run streets, transit, and parking. Office space in the Texas Medical Center leases for just over $28.25 per square foot.
Greenspoint has nearly 9 million square feet of office space at some of the lowest prices per square foot. Rent space in this neighborhood for less than $19 per square foot. The Greenspoint business district covers seven square miles and provides office space to approximately 3,000 companies. Energy and shipping are the two most prominent industries in Greenspoint. George Bush Intercontinental Airport is only a few miles east of Greenspoint off of Hardy Toll Road. Drivers can access Greenspoint via the North Freeway or Sam Houston Tollway, and the Greenspoint Transit Center operates four bus lines.
Southwest Houston is roughly defined by the area below Katy Freeway and between the Sam Houston Tollway and Highway 6. One of the most diverse neighborhoods with robust Jewish, Hispanic, Asian American, and Indian communities, most people who work in Southwest Houston also live there. Electronics, manufacturing, oil, and healthcare management services are the leading industries in the area. Commuters have access to multiple METRO Park & Ride locations in the area. Office rent is quite cheap in Southwest Houston at just over $15.50 per square foot on average.
Sugar Land was founded as a sugar plantation but is now a city within the Houston metropolitan area and is one of the fastest growing cities in Texas. Outlook Magazine and Texas Business both designated Sugar Land as one of the Top Cities in Texas for business expansion. Sugar Land houses more than 4.2 million square feet of office space inventory, renting at an average of slightly below $29.50 per square foot.
Spring, Texas, is a census-designated place (CDP) in Harris County and is part of the Houston-The Woodlands-Sugar Land metropolitan area. It is around 25 miles north of Downtown Houston, and presents affordable, quality office spaces for businesses to lease. Asking rents for all classes tend to average $24 per square foot.
Top commercial real estate listings in Houston
Houston’s enormous office market presents a wide range of types of office spaces and suites, but it can also be intimidating when a business is just beginning the search for commercial real estate. Contact one of our professional brokers to help you make the executive decision when selecting your next Houston office space. Or, take a look at one of these three premier properties in the city:
- 12 Greenway Plaza: 12 Greenway Plaza is a 15-story office building conveniently located in Greenway Plaza near Interstate 59 and Interstate 610 about five minutes west of Downtown Houston. Notable tenants include Amegy Bank, Abby Office Centers, and Direct Energy. Currently, seven office spaces ranging from 100-8,687 square feet in size are vacant and available to new renters. Contact SquareFoot to schedule a tour or inquire about pricing. 12 Greenway Plaza offers great amenities, including access to banking services, a state-of-the-art conference center, a health clinic, an on-site hotel, and a five-star restaurant.
- 1000 Louisiana Street: Built in 1983, 1000 Louisiana Street—or Wells Fargo Plaza—is a 71-story skyscraper located in Downtown Houston. At 992 feet tall, it’s the city’s second-tallest building and the nation’s 20th-tallest building. Wells Fargo Plaza houses Dynegy, Targa, the Houstonian Lite club, the Consulate-General of the United Kingdom in Houston, Morgan Lewis, and, of course, Wells Fargo. Right now only one unit, a partial floor suite that is 10,048 square feet in size, is vacant. Contact SquareFoot for pricing details. Those working at Wells Fargo Plaza have access to a cafe, a premium fitness center, FedEx & UPS overnight services, and banking services. Commuters can easily access the building via the Houston Tunnel System or main highway I-49.
- 2111 Norfolk Street: Norfolk Tower is an office building located at 2211 Norfolk Street in Houston. The building currently has 11 office spaces ranging from 444 to 7,251 square feet in size. Contact SquareFoot to schedule a tour of the property or to inquire regarding pricing.