Houston logged another quarter of positive office space absorption with Geico’s renewal topping the list.
The auto insurer renewed its full-building lease at Mason Creek I in Katy, according to Colliers. It was the third quarter’s largest office transaction.
Mason Creek I, at 21420 Merchants Way, is a 135,000-square-foot office building constructed in 2013. Nicola Wealth has owned it since 2015. It’s about 24 miles west of downtown Houston.
The property is in Houston’s Katy submarket, which accounted for 7.8 percent of leasing activity in the third quarter. It ranked sixth in terms of submarkets with the largest amount of positive absorption. West Loop and the Energy Corridor topped the list; both logged more than 200,000 square feet of positive absorption.
Houston’s office market has been slow to recover from the pandemic, but the market indicators are gradually improving.
The metro’s overall vacancy rate dropped from 27.9 percent a year ago to 27.4 percent. In the third quarter last year, the market saw 23,700 square feet of negative absorption. This year, 555,000 square feet was absorbed in July through September, marking the second quarter in a row that more space was leased than vacated, marking the first sustained positive absorption since 2019, Colliers said.
The flight to quality office trend seen throughout the country is also at play in Houston.
The average vacancy of properties built in the last decade is 11.9 percent, highlighting companies’ preference for newer office space with top-of-the-line amenities.
For example, Skanska delivered Norton Rose Fulbright Tower, a 386,000-square-foot office building at 1550 Lamar Street, last year. The 28-story building is 62 percent leased, with Third Coast Infrastructure being the latest company to sign a deal to move into the trophy building.
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