Downtown Houston Office Space for Rent
Ever since it was established in 1836, Downtown Houston has been the city’s most prominent business district. Nine Fortune 500 corporations have offices downtown, including United Airlines, JPMorgan Chase, and Marathon Oil.
Downtown contains Houston’s civic center with Houston City Hall and Harris County courthouses. But the neighborhood isn’t all business—it’s also a major hub of entertainment and recreation. Whether you’re into professional sports, touring museums, the performing arts, or historic locations, Downtown Houston has it all.
Downtown Houston Office Space | Lease Data & Trends
Downtown Houston has nearly 40 million square feet of office space, so plenty of options are available for companies of all sizes, from executive office suites to large open spaces for collaborative teams. Our brokers recommend budgeting 150 square feet per employee. The only other submarkets with comparable amount of office space inventory are Galleria and the Energy Corridor.
The average Downtown Houston office space rents for $41 per square foot, well above the Houston office space average of $30 per square foot. This is because 80% of the office space in Downtown Houston is in Class A office buildings, which have average asking rents of $45 per square foot. However, the 20% vacancy rate and recent lull in leasing activity and new construction has kept prices low compared to other major metro areas such as Washington, D.C. or New York.
As the economy thrives, demand Downtown Houston office space continues to grow. There is more than 2 million square feet of new office space under construction to help accommodate the growing demand.
The Houston office space market has seen subdued leasing activity and rising vacancy rates — as of January 2019, only two quarters since the start of 2015 have seen more than four million square feet of leasing activity, compared to 14 consecutive quarters from 2011 through the end of 2014. This has created a favorable leasing environment for new businesses to secure space at lower rates. However, given the city’s economic ties to energy and oil prices, the office leasing environment looks to stay uncertain for the foreseeable future.
What Brokers Say About Office Space for Lease in Downtown Houston
The Houston commercial real estate market ended 2018 with its first consecutive quarters of declining vacancy rates in more than three years. New construction played a key role in the end of 2018, impressive performance, as more 700,000 square feet of new inventory was 100% leased upon completion.
Notable lease signing in 2018 include:
ConocoPhillips, moving into a new 600,000 square feet Houston office at Energy Center 4.
HPE leasing 568,000 square feet at Springwoods Village.
McDermott committing to 525,000 square feet at the never before occupied Energy Center V (completed in 2016).
Transocean leasing 300,000 square feet at the Enclave Place
Waste Management signed a lease for 284,000 square feet of office space at Capitol Tower, which is set to deliver in 2019.
Despite the growth in leasing activity, Houston finished 2018 with negative net absorption the fifth year in a row. However, there are positive signs that the economy and commercial real estate market are trending in a positive direction. Thanks to strong job growth and increased leasing activity, Houston is finally in a position for sustained growth. Tenants will have the upper hand in leasing negotiations for a few more quarters, but increased competition for office space will put eventually landlords at an advantage.
Getting to, From, and Around Downtown Houston
Downtown Houston is 2 square miles in size, and rests at the heart of the city of Houston with Northside to the north; Fifth Ward and Sharptown to the east; Third Ward and Midtown to the south; and Sixth Ward and Montrose to the west. Interstate 10, Interstate 45 and Interstate 69 all come together Downtown making getting there a breeze.
More than 100,000 people travel through Downtown Houston every day for their commute, and the neighborhood makes it easy. Those looking for environmentally friendly ways to travel can explore the creative network of pedestrian tunnels and skywalks or trying biking, which is a very popular way to get around when the weather permits. Those looking for faster travel options have plenty of choices as well. Downtown is situated at the center of the light rail system and the metropolitan freeway network; it also houses the headquarters to the Metropolitan Transit Authority of Harris County.
Food and Drink Options in Downtown Houston
If you’re looking for a chance to meet outside the office for lunch or a meeting, consider one of the many unique options the neighborhood has to offer such as: Brasserie du Parc, Kulture, Conservatory, Rachels Cafe or The Pho Spot. If a visiting business partner needs a place to stay, look up Marriott Marquis Houston, Four Seasons Hotel or JW Marriott Downtown Houston.
Get to Know Downtown Houston
Houston is filled to the brim with urban opportunity but flavored with Southern charm. The entire city of Houston used to be the size of Downtown Houston until two real estate investors from New York bought 6,642 acres of land after the Texas Revolution, and a team of surveyors plotted the land for city expansion. In 1995, the Houston Downtown Management District began working to revitalize the city’s urban core while maintaining its style to make it clean, safe and beautiful.
Downtown Houston offers plenty of opportunities to enjoy the outdoors. It houses 15 public parks—linear parks, block parks and plazas. They’re all very different. For example, in Downtown Houston’s historic district, Market Square Park includes seemingly unrelated features: a 9/11 Memorial, a Greek restaurant and two dog runs. Houston’s Minute Maid Park and Toyota Center are home to the Astros and Rockets, respectively.
Those interested in the performing arts don’t have to go to NYC. Houston is one of the United States’ only five cities that has permanent professional resident companies in opera, ballet, music and theater. Well-known venues include the Wortham Center, the Alley Theater, the Hobby Center and the Bayou Music Center.
About the Author
Graham Shorr is the Chief of Staff at SquareFoot. In addition to supporting the executive team on corporate strategy and operations, Graham leads North America Market Research & Analysis. Graham is an alumnus of Carnegie Mellon University.