Houston Office Space for Rent
Located in Southeast Texas less than an hour’s drive from the Gulf of Mexico, Houston is the most populous city in Texas and attracts a young, diverse population who enjoy the dynamic offerings of a major city at a low cost of living. Home to the Johnson Space Center and the Buffalo Bayou river, Houston earned the nicknames “Space City” and “Bayou City,” although many prefer the simple moniker “H-Town.”
From established energy companies to small tech startups, office space in Houston can fit a variety of business’ needs, budgets, and brands. The energy industry makes up 40% of Houston’s business economy, with more than 5,000 energy, oil, and gas companies in the area, including headquarters for Marathon Oil, Sysco, Halliburton, ConocoPhillips, and more. Beyond energy, Houston also makes substantial contributions in the technology, shipping, biomedical research, aeronautics, manufacturing, healthcare, e-commerce, and media sectors.
Houston Office Space | Lease Data & Trends
Office space in Houston costs an average of $29 per square foot, with office space in Class A buildings renting for an average of $35 per square foot. According to industry data from Q1 of 2018, Houston has nearly 185 million square feet of office space with an average availability rate of nearly 25%. Nearly 2 million square feet of office space is currently under construction, all in either Downtown Houston or the Woodlands.
Houston office space leasing activity has been relatively slow the past three years. This subdued leasing activity coupled with rising vacancy rates has pushed down rental rates. Since January 2015, Houston has only seen two out of fourteen quarters with more than four million square feet of leasing activity. For comparison every quarter from Q3 2011 to Q4 2014 saw more than four million square feet of leasing activity. Since 2014, citywide vacancy rates have climbed from nearly 13% to the 25% we currently see.
The biggest recent change to the Houston commercial real estate market was the increase of spaces available for sublease. This subset of the market grew by more than 1 million square feet, and totaled its highest amount since Q4 2016. Most sublease space is in Class A buildings located in Houston’s top submarkets, and is already built-out and furnished.
Overall, Houston is the sixth largest commercial real estate market in the US, ahead of cities such as Boston, Atlanta, Philadelphia, San Francisco, and Phoenix. Houston only trails the New York City, Washington, D.C., Chicago, Los Angeles, and Dallas–Fort Worth office space markets.
Houston Office Space for Rent | Popular Neighborhoods
Downtown Houston Central Business District (CBD)
This downtown Houston district covers just under two square miles but is home to the city’s best-known attractions and entertainment hubs like 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.
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 is a favorable area for legal, insurance, and real estate offices as well as software developers and companies in the Technology, Advertising, Media, and Information sector. A growing number of co-working spaces in Midtown have made the neighborhood increasingly attractive to entrepreneurs and startups. The METRO Red Line runs has three stops along Midtown’s Main Street, and 30 bus routes serve the area.
Houston Heights is a short drive northwest of Downtown Houston known for its boutiques, mom and pop shops, unique architecture, and quaint character. At slightly less than $24 per square foot, local office space is nearly 25% below the citywide average.
Houston’s Energy Corridor includes Katy Freeway West, Katy Freeway East, and Westchase. Average office space in the Energy Corridor matches the city average, but Katy Freeway East has prices closer to $34 per square foot. 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.
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 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.
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.
Greenspoint has 9 million square feet of office space at some of the lowest prices 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.
Galleria is a mixed-use urban development centered around the upscale shopping mall of the same name, The Galleria. The Galleria has three main office buildings with approximately 1.1 million square feet of office space between them: the Galleria Financial Center, Post Oak Tower, and the Galleria Tower. 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. The abundance of dining options in the mall and the presence of two Westin hotels next to the office towers makes Galleria an ideal location for companies who host regular business guests. Get to Galleria via West Loop South, or take a bus or the Green Line.
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. Based on recently commercial real estate leasing data, there is more than 4 million square feet of office space inventory, renting at an average of slightly below $27 per square foot, with the 3 million square feet of office space in Class A buildings renting for around $32 per square foot. Class B office space in Sugar Land can be found for around $22 per square foot.
Getting Around Houston
People in Houston love to drive, and 90% of the workforce commutes with a car. To avoid heavy 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.
Houston’s METRO has 28 Park & Ride lots throughout the city that provide 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.
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, while the William Hobby Airport lies to the southwest.
Walkers and bikers will find they have an easy time getting around Houston CBD. In addition to greenery-filled streets, Houston has an underground system of tunnels that spans six miles below Downtown 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, and the city currently has 160 miles of dedicated bikeways.