Market Report · Q2 2026

Greater Houston Office Market

Houston's office market posted positive net absorption in the second quarter after several quarters of occupancy loss. More than 60% of leased square footage landed in newer Trophy and Class A buildings, and with limited new construction ahead, we expect gradual improvement over the next six to twelve months.

22.9%

Direct vacancy

23.1% last quarter

$31.48

Direct asking gross rent / SF

$31.07 last quarter

496,066 SF

Net absorption

(277,613) SF last quarter

2,376,783 SF

Leasing activity

2,860,602 SF last quarter

337,651 SF

Construction pipeline

Down 30.2% quarter over quarter

4,738,673 SF

Available sublease

4,899,748 SF last quarter

For the conversation

Flight to quality is the defining trend.Class A properties continue to outperform as occupiers prioritize workplace quality, operational efficiency, and employee experience.
Absorption turned positive.Net absorption improved by more than 773,000 SF from the prior quarter, a sign of healthier tenant demand.
New supply is constrained.The pipeline fell 30.2% to 337,651 SF, and most proposed projects need substantial preleasing before breaking ground.
Capital is selective, but active.The acquisition of Greenway Plaza highlighted investor interest in premier assets, while value-add opportunities continue to attract disciplined capital.
Relocations favor the Energy Corridor.Recent corporate relocations and merger activity have reinforced the Katy Freeway corridor as a premier district for energy, engineering, and professional services firms.

Our outlook

Improving absorption, resilient rents, limited new construction, and steady investment point toward continued stabilization through the rest of 2026.