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Q1 2021 | The Woodlands Office Submarket Snapshot

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2019_Q2_TheWoodlands_HERO_1536x1040
By Lisa Bridges

Key Takeaways

  • Leasing activity increased over the quarter
  • Absorption remained negative
  • Vacancy continued to increase
  • Rental rates decreased
2021_Q1_TheWoodlands_Vacancy Rate    2021_Q1_TheWoodlands_NetAbsorption
     
 2021_Q1_TheWoodlands_UnderConstruction    2021_Q1_TheWoodlands_LeaseRates

Highlights

The Woodlands office market vacancy rate increased from 15.3% to 16.8% over the quarter but is still well under the Houston Metro and Houston CBD average vacancy rates of 22.3% and 25.3%, respectively. Construction activity remained steady between quarters and leasing activity increased as COVID restrictions in Texas eased. A large portion of the negative absorption during Q1 can be attributed to Exxon vacating 110,080 SF in 1725 Hughes Landing. Looking ahead, leasing activity will continue to increase and The Woodlands submarket should record some positive absorption by year-end.

Market Indicators 

2021_Q1_TheWoodlands_MarketIndicators

Historic Comparison

2021_Q1_TheWoodlands_HistoricComparison

Recent Transactions

2021_Q1_TheWoodlands_RecentTransactions

Market Fundamentals

2021_Q1_TheWoodlands_MarketFundamentals

Based on a 5-year historical average, the forecast trends to positive net absorption over the year.

The Woodlands Submarket Map

TheWoodlands_CaptureImage

 

Q1 2018 Woodlands Market Indicators

 

Q1 2018 Woodlands Market Indicators

Leasing activity continues to be healthy, with 55 leases completed in Q3
compared to 44 leases completed in Q2 2019. A majority of those tenants
that completed leases in Q3 will relocate during Q4 2019 and Q1 2020, thus
increasing absorption in the near-term. Aon Services Corporation signed a lease
for 33,312 SF at One Hughes Landing and will move in Q1 2020. PTW Energy
Services leased 19,446 SF in Sierra Pines office building and is expected to move
into the space in Q1 2020.
The Woodlands office submarket recorded 285,420 SF of negative net absorption,
which can be attributed to Southwestern Energy putting its 10000 Energy Drive
South Tower on the market for lease. Without the addition of the 288,609 SF
South Tower, the submarket would have recorded positive net absorption.
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Q1 2021 | The Woodlands Office Submarket Snapshot

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Related Experts
Norm Munoz | Colliers | Houston - The Woodlands

Norm Munoz

Executive Vice President

Houston - The Woodlands

+1 713 830 2136
+1 713 417 8306
Email

Mr. Munoz has been involved in the commercial real estate business for 33 years.

Since 2011, Norm has exclusively worked with The Howard Hughes Corporation and The Woodlands Development Company as part of the Colliers team responsible for the leasing of their 4.11 million square foot portfolio in The Woodlands, Texas. During this time, Mr. Munoz has been involved in 323 lease transactions for completed office buildings, office buildings under construction and Build-to-Suit projects totaling 3.99 million rentable square feet and more than $832 million.

Norm’s attention to detail, ability to interpret raw data and his market knowledge, coupled with his working experience with the leading commercial brokerage firms, building owners, REITS, developers, property management companies and financial institutions make him an asset to his client’s real estate decision-making process.

Prior to joining Colliers in 2000, Norm worked from 1992 to 1999 with Baca Landata, Inc. (a subsidiary of Stewart Title) and The Baca Group. The Baca companies were the leading local providers for commercial real estate information and as Vice President and Senior Analyst he was responsible for writing the nationally recognized Houston Office Market Guide each quarter, developing new business and servicing clients.

From 1990 to 1992, Mr. Munoz was a Research Analyst with Property Research & Investment Consultants, Inc., responsible for tracking the absorption, lease rates and occupancy each quarter for 1,800 general purpose and medical-professional office buildings. Property Research was the first real estate information company to systematically survey Houston’s office and industrial markets and its methodologies and level of accuracy set the standard for today’s commercial real estate industry.

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