Houston’s office market weakens over the quarter and most likely will not see improvement in the short-term

1. Houston’s office market weakens over the quarter and
most likely will not see improvement in the short-term
Research &
Forecast Report
HOUSTON | OFFICE
Q2 2020
Lisa Bridges Director of Market Research | Houston
Commentary by Patrick Duffy MCR
The Houston office market weathered the first phase of the
COVID-19 pandemic, as we anticipated, with limited immediate
impact on “the numbers.” The lock-downs and social distancing
forced companies to embrace a work from home strategy and begin
the process of rethinking their office utilization going forward. The
majority of surveys we have seen indicate that the vast majority of
office workers and their managers were pleasantly surprised by the
productivity they were able to maintain in a remote environment.
Returning to the office has been a slow process as the stay-at-
home orders were incrementally lifted. Many companies have
decided to keep all of their workers out of the office for the balance
of the summer and some have told employees to plan on working
from home indefinitely. Most companies have adopted a voluntary
return to the office policy combined with strong protocols for
reducing the risk of infection at the office.
As we begin the 3rd quarter, we have seen an increase in activity
from potential office users in pursuing new leases. It appears
that after an initial shock and some “wait and see” delays, most
companies are starting to realize that we will be operating in a
COVID-19 reality for some time and that they can no longer just sit
back and wait for the virus to resolve.
The overall vacancy rate increased to 20.5% from 20.1% at the
end of Q2. This increase in the vacancy rate was caused by net
negative absorption of 513,316 square feet and the delivery of
454,523 square feet of new product. We also observed an increase
in sublease availability of approximately 1,000,000 square feet
in the second quarter. The bulk of this space was placed on the
market by companies concentrated in the energy and petrochemical
industries, both hit hard by the drop in demand for refined products
caused by the global lock-down.
Asking rents were relatively flat from the previous quarter and
the second quarter last year. Downtown saw the most significant
decline year over year and suburban asking rents increased very
slightly. Our team reports that Landlords continue to fight to hold
face rates, but are being much more generous with free rent and
Summary Statistics
Houston Office Market Q2 2019 Q1 2020 Q2 2020
Vacancy Rate 19.9% 20.1% 20.5%
Net Absorption -553,347 -281,656 -513,316
Deliveries 949,841 251,672 454,523
Under Construction 2,180,833 3,928,737 4,266,982
Class A Vacancy Rate
CBD
Suburban
20.4%
21.1%
20.3%
20.8%
20.7%
21.2%
Asking Rents
Per Square Foot Per Year
Houston Class A $35.20 $34.85 $34.98
CBD Class A $45.64 $43.92 $43.84
Suburban Class A $32.08 $32.04 $32.24
Market Indicators
Relative to prior period
Annual
Change
Quarterly
Change
Quarterly
Forecast*
VACANCY
NET ABSORPTION
DELIVERIES
UNDER CONSTRUCTION
*Projected
Share or view online at colliers.com/houston

2. 0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
CBD Vacancy Suburban Vacancy
2 Houston Research & Forecast Report | Q2 2020 | Office | Colliers International
Commentary - continued
tenant improvement allowances for larger, good credit tenants, effectively
reducing the occupancy expense over the term.
Newer buildings continue to perform better than the older inventory as the “flight
to quality” continues in Houston. With subdued demand and over 4 million square
feet of office under construction, we expect the overall vacancy rate to increase
over the next twelve months. Companies will be re-balancing their office strategy
with more work from home AND more social distancing in the office, which will
move us toward a less dense office occupancy. Less density, more distance
requires more space – that need will be off-set by more employees working from
home. We will not clearly understand the net impact of these two forces on net
office space requirements for some time, but we do expect the office market to
remain weak for the foreseeable future.
Large Sublease Availabilities (Total available in building and/or complex)
BUILDING TENANT SUBMARKET SF
Noble Energy Center II Noble Energy FM 1960 437,793
Energy Tower II KTI Corporation (Technip) Katy Freeway 297,919
GreenStreet Tower Reliant Energy Retail CBD 194,768
Twelve Greenway Plaza CPL Energy Greenway Plaza 173,760
919 Milam St SNC-Lavalin Group Inc CBD 154,862
Westway Plaza GE Oil & Gas West Belt 118,450
10000 Richmond Ave National Oilwell Varco Westchase 118,215
1500 Post Oak Blvd BHP Billiton Petroleum West Loop 113,565
Williams Tower Valaris West Loop 103,611
Source: CoStar
Of the 1,661 existing office buildings in our survey, 87 buildings have 100,000 SF
or more contiguous space available for lease or sublease. There are 27 options
with 200,000 SF available for lease or sublease. Citywide, 6.6 million SF of
sublease space is listed as available and 2.3 million SF of the space is vacant.
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
Q2
2014
Q4
2014
Q2
2015
Q4
2015
Q2
2016
Q4
2016
Q2
2017
Q4
2017
Q2
2018
Q4
2018
Q2
2019
Q4
2019
Q2
2020
Class A Class B Houston Total
Job Growth & Unemployment
(not seasonally adjusted)
UNEMPLOYMENT 5/19 5/20
HOUSTON 3.4% 13.9%
TEXAS 3.1% 12.7%
U.S. 3.6% 13.3%
JOB GROWTH
Annual
Change
# of Jobs
Lost
HOUSTON -8.6% -228.1K
TEXAS -7.1% -908.8K
U.S. -8.6% -17.7M
CBD vs. Suburban
CLASS A OFFICE VACANCY
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
CBD Rents Suburban Rents
CLASS A OFFICE RENTS
HISTORICAL AVAILABLE SUBLEASE SPACE
AVAILABLE SUBLEASE SPACE - 100,000 SF OR GREATER

3. 33 Houston Research & Forecast Report | Q2 2020 | Office | Colliers International
Absorption & Demand
Houston’s office market posted negative net absorption of 513,316 SF in the second quarter, pushing the mid-year 2020 total net
absorption to negative 794,972 SF. CBD Class B space recorded the only gain in Q2, posting 17,121 SF of positive net absorption, while
suburban Class B space reported the largest loss, posting 246,412 SF of negative net absorption. Since tenants typically do not move
into lease space immediately after signing a lease, absorption lags and can occur at anytime after. We believe absorption numbers will
trail even longer than usual in the short-term due to the “stay-at-home” orders amid COVID-19, so absorption will more than likely remain
negative moving into Q3 2020.
Rental Rates
Houston’s average asking rental rate increased over the quarter from $29.59 per SF to $29.77 per SF. The average CBD asking rate
dropped from $39.38 per SF to $39.10 per SF and Houston’s average suburban rental rate rose to $27.34 per SF from $27.02 per SF.
Overall, rental rates only increased by 0.6% on a quarterly basis and by 0.1% on an annual basis. Suburban Class B rates posted the
largest annual percentage increase of 4.6%, while CBD Class A rates posted the largest annual percentage decrease of 3.9%.
Leasing Activity
Houston’s office leasing activity fell 35% over the quarter from 4.5M SF to 2.9M SF primarily due to the Covid-19 “stay-at-home” orders
in the greater Houston area. Leasing activity includes new/direct, sublet, renewals, expansions in existing buildings and pre-leasing in
proposed buildings. Some of the more notable transactions that did occur in Q2 2020 are listed in the table below.
Q2 2020 Select Office Lease Transactions
BUILDING NAME/ADDRESS SUBMARKET SF TENANT LEASE DATE
Five & Three Greenway Plaza Greenway Plaza 972,145 Occidental Petroleum3
May-20
4460 Highway 225 Gulf Freeway/Pasadena 80,613 Universal Plant Services2
Apr-20
CityNorth 3 North Belt 70,035 GSA1
Apr-20
Jacobs Plaza Katy Freeway 50,380 Undisclosed2
Jun-20
America Tower Allen Parkway (Midtown) 45,063 BDO1
Apr-20
1290 Hercules Ave NASA/Clear Lake 32,000 Axiom Space1
Apr-20
1
New/Direct 2
Sublease 3
Renewal or Expansion
Sales Activity
Houston’s office investment sales volume decreased significantly over the quarter from $462 million in Q1 2020 to $74 million in Q2 2020.
The average sales price per square foot trended up from $268 to $281 per SF annually and Houston’s average office cap rate moved from
6.8% to 6.7%.
Sources: CoStar and Real Capital Analytics
$0
$50
$100
$150
$200
$250
$300
$350
United States Houston
AVERAGE OFFICE SALES PRICE PER SF
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
United States Houston
AVERAGE OFFICE CAP RATE

4. 4 Houston Research & Forecast Report | Q2 2020 | Office | Colliers International
Houston Office Market Summary (CBD, Suburban, & Overall)
INVENTORY DIRECT VACANCY
SUBLEASE
VACANCY
VACANCY VACANCY RATE (%)
NET ABSORPTION
(SF)
RENTAL
RATE
CLASS
# OF
BLDGS.
TOTAL (SF) (SF)
RATE
(%)
(SF)
RATE
(%)
TOTAL
(SF)
Q2-2020 Q1-2020 Q2-2020 Q1-2020
AVG
($/SF)
CBD
A 34 31,827,346 5,906,352 18.6% 690,229 2.2% 6,596,581 20.7% 20.3% -138,635 -167,017 $43.84
B 30 8,640,617 2,961,734 34.3% 96,305 1.1% 3,058,039 35.4% 35.6% 17,121 -37,478 $30.23
C 9 569,543 78,560 13.8% 0 0.0% 78,560 13.8% 13.8% 0 13,591 $17.61
Total 73 41,037,506 8,946,646 21.8% 786,534 1.9% 9,733,180 23.7% 23.4% -121,514 -190,904 $39.10
SUBURBAN
A 402 97,136,659 19,116,086 19.7% 1,491,908 1.5% 20,607,994 21.2% 20.8% -76,316 245,035 $32.24
B 926 75,720,188 14,353,895 19.0% 332,262 0.4% 14,686,157 19.4% 19.0% -246,412 -287,788 $21.40
C 260 10,623,453 914,429 8.6% 7,076 0.1% 921,505 8.7% 8.0% -69,074 -34,408 $18.38
Total 1588 183,480,300 34,384,410 18.7% 1,831,246 1.0% 36,215,656 19.7% 19.3% -391,802 -77,161 $27.34
OVERALL
A 436 128,964,005 25,022,438 19.4% 2,182,137 1.7% 27,204,575 21.1% 20.7% -214,951 78,018 $34.98
B 956 84,360,805 17,315,629 20.5% 428,567 0.5% 17,744,196 21.0% 20.7% -229,291 -325,266 $22.91
C 269 11,192,996 992,989 8.9% 7,076 0.1% 1,000,065 8.9% 8.3% -69,074 -20,817 $18.32
Total 1661 224,517,806 43,331,056 19.3% 2,617,780 1.2% 45,948,836 20.5% 20.1% -513,316 -268,065 $29.77
INVENTORY DIRECT VACANCY
SUBLEASE
VACANCY
VACANCY VACANCY RATE (%)
NET ABSORPTION
(SF)
RENTAL
RATE
CLASS
# OF
BLDGS.
TOTAL (SF) (SF)
RATE
(%)
(SF)
RATE
(%)
TOTAL
(SF)
Q2-2020 Q1-2020 Q2-2020 Q1-2020
AVG
($/SF)
ALLEN PARKWAY (MIDTOWN)
A 10 2,497,830 295,342 11.8% 2,541 0.1% 297,883 11.9% 12.4% 12,965 -21,909 $36.80
B 33 2,471,785 332,348 13.4% 25,655 1.0% 358,003 14.5% 12.5% -48,635 2,187 $29.78
C 11 353,555 93,979 26.6% 0 0.0% 93,979 26.6% 25.8% -2,800 1,972 $30.15
Total 54 5,323,170 721,669 13.6% 28,196 0.5% 749,865 14.1% 12.8% -38,470 -17,750 $32.70
BAYTOWN
B 2 114,474 11,951 10.4% 0 0.0% 11,951 10.4% 9.9% -666 0 $22.95
C 2 41,208 10,513 25.5% 0 0.0% 10,513 25.5% 25.5% 0 0 -
Total 4 155,682 22,464 14.4% 0 0.0% 22,464 14.4% 4.1% -666 0 $21.45
BELLAIRE
A 5 1,004,245 128,765 12.8% 2,386 0.2% 131,151 13.1% 8.9% -42,073 -3,000 $29.26
B 15 1,747,001 133,374 7.6% 0 0.0% 13,374 7.6% 7.8% 2,907 -71,217 $22.63
C 5 283,569 78,823 27.8% 0 0.0% 78,823 27.8% 10.3% -49,729 284 $18.35
Total 25 3,034,815 340,962 11.2% 2,386 0.1% 223,348 7.4% 8.4% -88,895 -73,933 $24.14
CONROE AND OUTLYING MONTGOMERY CO
A 2 84,913 0 0.0% 0 0.0% 0 0.0% 0.0% 0 0 $0.00
B 9 364,423 0 0.0% 0 0.0% 0 0.0% 0.0% 0 0 $25.83
C 6 247,634 4,500 1.8% 0 0.0% 4,500 1.8% 1.8% 0 1,410 $0.00
Total 17 696,970 4,500 0.6% 0 0.0% 4,500 0.6% 1.8% 0 1,410 $25.83
E. FORT BEND CO SUGAR LAND
A 17 3,059,529 348,262 11.4% 34,907 1.1% 383,169 12.5% 10.9% -50,394 -34,945 $33.26
B 37 2,012,296 205,029 10.2% 14,857 0.7% 219,886 10.9% 9.7% 19,085 64,361 $25.52
C 2 46,239 0 0.0% 0 0.0% 0 0.0% 0.0% 0 0 $0.00
Total 56 5,118,064 553,291 10.8% 49,764 1.0% 603,055 11.8% 11.8% -31,309 29,416 $30.39
Houston Suburban Office Market Summary

5. 5 Houston Research & Forecast Report | Q2 2020 | Office | Colliers International
Houston Suburban Office Market Summary - Continued
INVENTORY DIRECT VACANCY
SUBLEASE
VACANCY
VACANCY VACANCY RATE (%)
NET ABSORPTION
(SF)
RENTAL
RATE
CLASS
# OF
BLDGS.
TOTAL
(SF)
(SF)
RATE
(%)
(SF)
RATE
(%)
TOTAL
(SF)
Q2-2020 Q1-2020 Q2-2020 Q1-2020
AVG
($/SF)
FM 1960
A 14 3,007,545 490,172 16.3% 31,379 1.0% 521,551 17.3% 18.1% 21,972 -25,256 $26.99
B 68 4,537,470 1,221,153 26.9% 9,939 0.2% 1,231,092 27.1% 26.9% 22,624 14,158 $17.90
C 25 874,085 63,496 7.3% 0 0.0% 63,496 7.3% 7.3% 707 -11,580 $16.98
Total 107 8,419,100 1,774,821 21.1% 41,318 0.5% 1,816,139 21.6% 16.8% 45,303 -22,678 $20.38
GREENWAY PLAZA
A 20 6,781,494 1,193,939 17.6% 90,609 1.3% 1,284,548 18.9% 20.2% 83,484 68,497 $37.77
B 31 3,411,967 450,769 13.2% 20,465 0.6% 471,234 13.8% 12.9% -32,173 -21,977 $29.69
C 10 350,055 36,691 10.5% 2,307 0.7% 38,998 11.1% 10.5% -2,415 -2,107 $22.74
Total 61 10,543,516 1,681,399 15.9% 113,381 0.5% 1,794,780 17.0% 17.5% 48,896 44,413 $35.28
GULF FREEWAY PASADENA
A 3 378,403 124,271 32.8% 0 0.0% 124,271 32.8% 36.1% 12,362 1,132 $38.73
B 42 2,315,903 214,616 9.3% 2,233 0.1% 216,849 9.4% 12.7% 76,163 44,214 $20.19
C 22 789,388 100,998 12.8% 0 0.0% 100,998 12.8% 12.9% 940 0 $24.44
Total 67 3,483,694 439,885 12.6% 2,233 0.1% 442,118 12.7% 14.6% 89,465 45,346 $21.21
I-10 EAST
B 6 427,851 77,333 18.1% 0 0.0% 77,333 18.1% 16.2% -8,173 -10,116 $18.53
C 4 150,124 0 0.0% 0 0.0% 0 0.0% 0.0% 0 0 $0.00
Total 10 577,975 77,333 13.4% 0 0.0% 77,333 13.4% 16.3% -8,173 -10,116 $18.53
KATY FREEWAY
A 85 21,708,295 3,304,593 15.2% 475,285 2.2% 3,779,878 17.4% 17.6% 163,705 258,760 $36.37
B 104 9,409,539 2,166,084 23.0% 48,085 0.5% 2,214,169 23.5% 22.7% -74,681 78,638 $22.91
C 26 1,185,767 69,021 5.8% 4,769 0.4% 73,790 6.2% 5.1% -13,114 -9,136 $21.18
Total 215 32,303,601 5,539,698 17.1% 528,139 1.6% 6,067,837 18.8% 22.0% 75,910 328,262 $30.92
KATY GRAND PARKWAY
A 14 1,545,440 262,434 17.0% 48,585 3.1% 311,019 20.1% 19.4% -11,329 2,260 $29.16
B 17 1,140,506 28,679 2.5% 0 0.0% 28,679 2.5% 2.5% -171 -7,712 $31.03
C 2 149,262 0 0.0% 0 0.0% 0 0.0% 0.0% 0 0 $0.00
Total 33 2,835,208 291,113 10.3% 48,585 1.7% 339,698 12.0% 10.1% -11,500 -5,452 $29.34
KINGWOOD HUMBLE
B 17 1,238,289 98,972 8.0% 0 0.0% 98,972 8.0% 6.8% -15,275 -4,071 $21.99
C 4 120,762 1,833 1.5% 0 0.0% 1,833 1.5% 0.7% -1,018 1,313 $17.37
Total 21 1,359,051 100,805 7.4% 0 0.0% 100,805 7.4% 6.2% -16,293 -2,758 $21.91
NASA CLEAR LAKE
A 12 1,730,515 270,809 15.6% 27,661 1.6% 298,470 17.2% 16.4% -14,517 -7,232 $24.56
B 41 2,690,098 529,397 19.7% 8,808 0.3% 538,205 20.0% 20.0% -1,492 5,917 $18.87
C 15 440,364 56,773 12.9% 0 0.0% 56,773 12.9% 12.3% -2,642 3,183 $17.73
Total 68 4,860,977 856,979 17.6% 36,469 1.4% 893,448 18.4% 22.9% -18,651 1,868 $20.59
NORTH BELT GREENSPOINT
A 26 5,583,870 3,370,012 60.4% 4,287 0.1% 3,374,299 60.4% 59.9% -31,413 1,131 $21.20
B 53 5,516,522 1,795,089 32.5% 1,327 0.0% 1,796,416 32.6% 34.2% 89,734 21,185 $15.89
C 22 1,196,594 105,948 8.9% 0 0.0% 105,948 8.9% 8.8% -1,214 -6,785 $11.44
Total 101 12,296,986 5,271,049 42.9% 5,614 1.4% 5,276,663 42.9% 44.3% 57,107 15,531 $19.20
NORTHEAST NEAR AND OUTLIER
A 3 642,223 14,025 2.2% 0 0.0% 14,025 2.2% 2.2% 0 0 $0.00
B 4 183,158 26,380 14.4% 6,744 3.7% 33,124 18.1% 18.4% 537 -15,169 $22.33
C 2 57,823 33,186 57.4% 0 0.0% 33,186 57.4% 45.9% -6,648 -9,960 $15.00
Total 9 883,204 73,591 8.3% 6,744 0.8% 80,335 9.1% 6.3% -6,111 -25,129 $14.77

6. 6 Houston Research & Forecast Report | Q2 2020 | Office | Colliers International
Houston Suburban Office Market Summary - Continued
INVENTORY DIRECT VACANCY
SUBLEASE
VACANCY
VACANCY VACANCY RATE (%)
NET ABSORPTION
(SF)
RENTAL
RATE
CLASS
# OF
BLDGS.
TOTAL
(SF)
(SF)
RATE
(%)
(SF)
RATE
(%)
TOTAL
(SF)
Q2-2020 Q1-2020 Q2-2020 Q1-2020
AVG
($/SF)
NORTHWEST AND NORTHWEST OUTLIER
A 9 1,986,421 604,597 30.4% 11,281 0.6% 615,878 31.0% 32.1% 21,866 45,067 $25.08
B 71 5,458,672 894,326 16.4% 13,271 0.2% 907,597 16.6% 16.0% -33,463 42,764 $19.50
C 33 1,326,096 71,620 5.4% 0 0.0% 71,620 5.4% 5.4% 0 4,901 $13.76
Total 113 8,771,189 1,570,543 17.9% 24,552 0.3% 1,595,095 18.2% 20.0% -11,597 92,732 $21.39
RICHMOND FOUNTAINVIEW
B 33 1,326,096 71,620 5.4% 0 0.0% 71,620 5.4% 5.4% 0 4,901 $13.76
C 9 314,300 3,582 1.1% 0 0.0% 3,582 1.1% 1.1% 0 1,357 $15.09
Total 42 1,640,396 75,202 4.6% 0 0.0% 75,202 4.6% 12.7% 0 6,258 $13.82
SAN FELIPE VOSS
A 3 1,714,911 396,030 23.1% 23,856 1.4% 419,886 24.5% 22.8% -29,333 12,825 $34.88
B 33 3,395,344 700,675 20.6% 3,250 0.1% 703,925 20.7% 20.0% -24,524 -34,795 $23.76
Total 36 5,110,255 1,096,705 21.5% 27,106 0.5% 1,123,811 22.0% 22.0% -53,857 -21,970 $27.78
SOUTH
B 11 331,493 35,713 10.8% 0 0.0% 35,713 10.8% 11.6% 2,779 -1,087 $26.38
C 4 165,387 23,477 14.2% 0 0.0% 23,477 14.2% 14.2% 0 73 $20.00
Total 15 496,880 59,190 11.9% 0 0.0% 59,190 11.9% 8.0% 2,779 -1,014 $27.26
SOUTH MAIN MEDICAL CENTER
B 9 798,970 118,615 14.8% 0 0.0% 118,615 14.8% 16.4% 12,270 21,128 $20.07
C 6 202,325 45,085 22.3% 0 0.0% 45,085 22.3% 22.8% 953 1,615 $18.25
Total 15 1,001,295 163,700 16.3% 0 0.0% 163,700 16.3% 9.7% 13,223 22,743 $16.65
SOUTHEAST
B 14 1,137,999 27,113 2.4% 0 0.0% 27,113 2.4% 2.3% -738 -1,201 $15.85
C 2 322,220 0 0.0% 0 0.0% 0 0.0% 0.0% 0 0 $0.00
Total 16 1,460,219 27,113 1.9% 0 0.0% 27,113 1.9% 8.1% -738 -1,201 $15.91
SOUTHWEST
A 6 1,586,913 444,811 28.0% 0 0.0% 444,811 28.0% 27.8% -3,674 38,584 $17.69
B 58 5,844,687 1,164,395 19.9% 25,533 0.4% 1,189,928 20.4% 20.4% 4,990 36,038 $17.11
C 28 1,332,136 87,139 6.5% 0 0.0% 87,139 6.5% 7.1% 7,906 -9,382 $13.43
Total 92 8,763,736 1,696,345 19.4% 25,533 0.3% 1,721,878 19.6% 19.3% 9,222 65,240 $17.07
SOUTHWEST FAR AND OUTLIER
A 2 158,720 40,681 25.6% 0 0.0% 40,681 25.6% 25.6% 0 0 $34.63
B 13 926,040 218,589 23.6% 0 0.0% 218,589 23.6% 23.6% 0 40,647 $0.00
C 3 91,661 2,500 2.7% 0 0.0% 2,500 2.7% 2.7% 0 4,500 $0.00
Total 18 1,176,421 261,770 22.3% 0 0.0% 261,770 22.3% 22.9% 0 45,147 $26.23
THE WOODLANDS
A 57 13,027,989 1,036,899 8.0% 94,705 0.7% 1,131,604 8.7% 8.0% -83,289 277,596 $37.75
B 60 4,078,935 825,960 20.2% 22,579 0.6% 848,539 20.8% 19.7% -46,053 -385,869 $33.51
C 6 169,558 2,220 1.3% 0 0.0% 2,220 1.3% 1.3% 0 -2,220 $18.62
Total 123 17,276,482 1,865,079 10.8% 117,284 0.7% 1,982,363 11.5% 9.8% -129,342 -110,493 $35.85
WEST BELT
A 29 3,732,820 716,511 19.2% 173,756 4.7% 890,267 23.8% 23.4% -16,417 -138,347 $27.25
B 36 2,011,249 431,578 21.5% 89,682 4.5% 521,260 25.9% 21.2% -95,271 -10,005 $22.72
C 4 112,629 0 0.0% 0 0.0% 0 0.0% 0.0% 0 0 $0.00
Total 69 5,856,698 1,148,089 19.6% 263,438 4.5% 1,411,527 24.1% 28.8% -111,688 -148,352 $24.99

7. 7 Houston Research & Forecast Report | Q2 2020 | Office | Colliers International7
Office Development Pipeline
4.3 million SF of office space is under construction and approximately 63% is pre-leased. 2.4 million SF is spec development of which
29% is pre-leased. Below is a summary of the office buildings under construction with a GBA of 150,000 SF or greater.
BUILDING NAME ADDRESS SUBMARKET SF
PRE-
LEASED
DEVELOPER/CONTRACTOR
EST.
DELIVERY
Texas Tower 845 Texas Ave CBD 1,101,856 39.1% Hines Securities, Inc. Oct-21
Marathon Oil 990 Town & Country Blvd Katy Freeway 440,000 100% Hines Dec-21
Crown Castle International 8020 Katy Freeway Katy Freeway 420,000 100% Excel Commercial Jan-21
HPE Building 3 City Place Dr The Woodlands 284,000 100% Patrinely Group, LLC May-22
HPE Building 4 City Place Dr The Woodlands 284,000 100% Patrinely Group, LLC May-22
The Ion 4201 Main St Allen Parkway (Midtown) 270,000 100% Hines Apr-21
Insperity Campus Bldg 5 US-59 N & Kingwood Dr. Kingwood/Humble 270,000 100% Insperity with D E Harvey Cleary Jun-20
9753 Katy Fwy 9753 Katy Freeway Katy Freeway 190,000 15.1% MetroNational Corporation Jun-21
Katy Ranch Phase II 24285 Katy Freeway Katy/Grand Pkwy West 150,900 0% Freeway Properties Jul-20
Village Tower II 9655 Katy Freeway Katy Freeway 150,000 6.0% Moody National Companies Mar-21
Post Houston 401 Franklin St CBD 150,000 19.3% Lovett Commercial Feb-21
Houston Suburban Office Market Summary - Continued
INVENTORY DIRECT VACANCY
SUBLEASE
VACANCY
VACANCY VACANCY RATE (%)
NET ABSORPTION
(SF)
RENTAL
RATE
CLASS
# OF
BLDGS.
TOTAL
(SF)
(SF)
RATE
(%)
(SF)
RATE
(%)
TOTAL
(SF)
Q2-2020 Q1-2020 Q2-2020 Q1-2020
AVG
($/SF)
WEST LOOP
A 52 17,137,221 3,761,210 21.9% 176,614 1.0% 3,937,824 23.0% 20.9% -186,845 -100,951 $38.12
B 48 5,309,195 805,555 15.2% 24,691 0.5% 830,246 15.6% 15.1% -26,698 1,078 $25.86
C 3 153,712 13,034 8.5% 0 0.0% 13,034 8.5% 8.5% 0 129 $18.75
Total 103 22,600,128 4,579,799 20.3% 201,305 0.9% 4,781,104 21.2% 18.9% -213,543 -99,744 $35.91
WESTCHASE
A 33 9,767,362 2,312,723 23.7% 294,056 3.0% 2,606,779 26.7% 27.5% 76,614 -129,177 $34.88
B 61 7,520,226 1,768,582 23.5% 15,143 0.2% 1,783,725 23.7% 22.8% -69,488 -101,785 $21.98
C 4 147,000 10,011 6.8% 0 0.0% 10,011 6.8% 6.8% 0 -3,975 $14.50
Total 98 17,434,588 4,091,316 23.5% 309,199 1.8% 4,400,515 25.2% 19.8% 7,126 -234,937 $28.65
Quoted gross rental rates for existing top performing office buildings
BUILDING NAME ADDRESS SUBMARKET RBA (SF)
YEAR
BUILT
%
LEASED
AVAIL.
SF
RENT
($/SF)
OWNER
1100 Louisiana 1100 Louisiana St CBD 1,327,882 1980/
2019
80.9% 273,814 $43.70 Enterprise Products
Partners L.P.
The Texas Drive Building 2245 Texas Dr E Fort Bend Co/
Sugar Land
166,000 2009 89.5% 33,025 $41.13 Lionstone Partners, LLC
Regions Financial Center 3773 Richmond Ave Greenway Plaza 183,129 2016 83.8% 55,208 $40.72 TRC Capital Partners, LLC
Town Centre Onc 840 W Sam Houston Pky Katy Freeway 253,714 2015 95.5% 17,733 $47.26 Moody Rambin
1885 Saint James Place 1885 Saint James Place West Loop/Galleria 164,939 2016 80.0% 32,996 $41.00 Mission Management Co
Two Hughes Landing 1790 Hughes Landing Blvd The Woodlands 197,696 2014 83.4% 32,758 $45.76-
$47.76
The Howard Hughes
Corporation
Lockton Place 3657 Briarpark Dr Westchase 186,000 2017 92.8% 13,311 $41.75 Triten Corporation
Note: Available SF includes direct and sublet space as well as any future available space currently listed.
Source: CoStar Property

8. 8 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International
Copyright © 2015 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While
every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No
responsibility is assumed for any inaccuracies. Readers are encouraged to consult their
professional advisors prior to acting on any of the material contained in this report.
Colliers International | Market
000 Address, Suite #
000 Address, Suite #
+1 000 000 0000
colliers.com/<<market>>
8 North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International
Copyright © 2020 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While
every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No
responsibility is assumed for any inaccuracies. Readers are encouraged to consult their
professional advisors prior to acting on any of the material contained in this report.
Colliers International | Houston
1233 West Loop South, Suite 900
Houston, Texas 77027
+1 713 222 2111
colliers.com/houston
FOR MORE INFORMATION
Lisa Bridges CPRC
Director of Market Research | Houston
+1 713 830 2125
lisa.bridges@colliers.com
Colliers statistical criteria
includes all general purpose multi
and single tenant office buildings
20,000 SF or greater.
Patrick Duffy MCR
President | Houston
+1 713 830 2112
patrick.duffy@colliers.com
Q2 2020 Houston Office Highlights
20.5% -513,316 SF
VACANCY QUARTERLY ABSORPTION
CLASS A: 57% CLASS B: 38% CLASS C: 5%
TOTAL INVENTORY BY CLASS
CURRENT
128.9M SF 84.4M SF
11.2M SF
TOTAL OFFICE
INVENTORY 224.5M SF
8.0M SF
2.9M SF
LEASING
ACTIVITY
-35%
QUARTERLY
DECREASE
UNDER
CONSTRUCTION 4.3M SF
NEW
CONSTRUCTION
(DELIVERIES)
454,523 SF
31
600 TRAVIS
600 Travis Street
1,656,529 / 22,575 / 75
78.7%
490,256
192,461
$44.32
1.0
Hines
717 TEXAS
717 Texas Avenue
697,541 / 21,127 / 33
55.7%
309,091
272,352
$45.07
2.1
Hines
TC ENERGY CENTER
700 Louisiana Street
1,268,480 / 25,000 / 56
74.1%
366,172
83,381
$44.77
2.0
M-M Properties
2
TEXAS TOWER
845 Texas Avenue
1,101,856 / 30,700 / 47
39.1%
671,342
671,342
$65.00
1.5
Hines
BUILDING NAME
ADDRESS
RBA / AVG FLOOR / # OF FLOORS
% LEASED
TOTAL AVAILABLE SF
MAX CONTIGUOUS SF
QUOTED RATE**
PARKING RATIO
OWNER
AVAILABLE* SUBLEASE*
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
1100 LOUISIANA
1100 Louisiana Street
1,327,882 / 23,060 / 55
80.9%
273,814
160,256
$43.70
1.8
Enterprise Products
Partners L.P.
HERITAGE PLAZA
1111 Bagby Street
1,149,635 / 26,652 / 51
100%
110,749
87,000
$53.85
2.4
AEW Capital
Management
CENTERPOINT ENERGY
1111 Louisiana Street
1,081,251 / 22,968 / 47
100%
0
0
N/A
2.5
CenterPoint Energy, Inc.
ONE ALLEN CENTER
500 Dallas Street
993,775 / 29,229 / 34
88.1%
296,068
83,109
$47.02
1.0
Brookfield Office
Properties, Inc.
KINDER MORGAN BLDG.
1001 Louisiana Street
937,003 / 28,510 / 32
100%
124,600
124,600
N/A
1.0
Kinder Morgan, Inc.
2120 25242322
WELLS FARGO PLAZA
1000 Louisiana Street
1,721,242 / 24,243 / 71
73.3%
499,033
101,773
$45.73
1.7
New York State Common
Retirement Fund
BUILDING NAME
ADDRESS
RBA / AVG FLOOR / # OF FLOORS
% LEASED
TOTAL AVAILABLE SF
MAX CONTIGUOUS SF
QUOTED RATE**
PARKING RATIO
OWNER
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
811 MAIN STREET
811 Main Street
972,474 / 27,000 / 46
99.2%
88,393
53,785
$51.78
1.2
Invesco Advisers, Inc.
ONE SHELL PLAZA
910 Louisiana Street
1,228,923 / 24,572 / 50
89.0%
152,281
125,887
$43.84
0.3
Busycon Properties LLC
NORTH BLDG
700 Milam Street
694,021 / 20,523 / 36
70.2%
199,066
142,954
$40.06
3.0
Metropolis Investment
Holdings Inc.
2 HOUSTON CENTER
909 Fannin Street
1,024,956 / 25,624 / 40
76.2%
285,028
68,043
$49.76
1.0
Brookfield Asset
Management Inc.
LYONDELLBASELL TOWER
1221 McKinney Street
1,065,215 / 24,000 / 46
80.2%
210,650
94,080
$47.04
1.0
Brookfield Asset
Management Inc.
811 LOUISIANA
811 Louisiana Street
588,423 / 31,500 / 26
61.0%
225,908
114,504
$47.21
2.0
Busycon Properties LLC
SOUTH BLDG
711 Louisiana Street
666,762 / 20,000 / 34
62.9%
298,491
207,758
$40.06
3.0
Metropolis Investment
Holdings Inc.
FULBRIGHT TOWER
1301 McKinney Street
1,247,061 / 24,452 / 51
70.6%
470,465
75,376
$45.53
1.0
Brookfield Asset
Management Inc.
5 HOUSTON CENTER
1401 McKinney Street
580,875 / 29,649 / 27
70.0%
176,789
124,756
$49.87
2.0
Spear Street Capital
1211
15
134 5 106PENNZOIL PLACE
609 MAIN AT TEXAS
609 Main Street
1,057,237 / 28,000 / 48
94.5%
133,089
28,337
$58.00
1.7
Hines
9
ONE CITY CENTRE
1021 Main Street
608,660 / 21,266 / 29
82.9%
467,803
167,663
$33.53
2.3
Accesso Partners, LLC
1000 MAIN
1000 Main Street
837,161 / 23,333 / 36
75.0%
204,952
144,394
$49.72
1.7
1000 Main Llc
1001 FANNIN
1001 Fannin Street
1,385,212 / 27,210 / 49
96.0%
613,987
338,026
$50.20
1.0
JMB Financial Advisors
191716
HILCORP ENERGY TOWER
1111 Main Street
406,600 / 17,678 / 23
95.7%
0
0
N/A
N/A
Hilcorp Ventures Inc.
18
CLASS A OFFICE BUILDINGS
CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS
JUNE 2020
338,026 SF
Available
March 2022
167,663 SF
Available
January 2021
87,000 SF
Available December 2020
Under
Construction
Delivering
10/21
14
Bank of America Tower
800 Capitol St
780,341 / 31,402 / 35
89.2%
64,594
31,257
$39.00 NNN
2.0
Beacon Capital Partners
7 8
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Available Sublease Space
Central Business District
Class A Class B
Available Sublease Space
Q1 2020
Class A: 985,715 SF or 2.8%
Class B: 384,782 SF or 4.5%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
$22.00
$24.00
$26.00
$28.00
$30.00
$32.00
$34.00
$36.00
$38.00
$40.00
$42.00
$44.00
$46.00
$48.00
Class A Rental Rate and Vacancy Percentage
Central Business District - Houston, TX
CBD Class A Rents CBD Class A Vacancy
*Vacancy percentage includes direct and sublease space.
AVAILABLE* SUBLEASE*
BUILDING NAME
ADDRESS
RBA / AVG FLOOR / # OF FLOORS
% LEASED
TOTAL AVAILABLE SF
MAX CONTIGUOUS SF
QUOTED RATE**
PARKING RATIO
OWNER
1500 LOUISIANA
1500 Louisiana Street
1,157,690 / 25,263 / 40
100%
0
0
N/A
1.1
ChevronTexaco Corp.
1301 FANNIN OFFICE TOWER
1301 Fannin Street
784,143 / 26,000 / 24
76.3%
130,366
67,544
$38.56
1.0
Netrality Properties
1400 SMITH
1400 Smith Street
1,250,677 / 25,013 / 50
100%
0
0
N/A
N/A
Chevron Corporation
1600 SMITH
1600 Smith Street
1,098,399 / 23,000 /51
57.9%
473,253
304,302
$37.73
1.0
Brookfield Office Properties, Inc.
WEDGE INT’L TOWER
1415 Louisiana Street
536,626 / 18,000 / 43
56.2%
252,630
119,708
$32.31
2.7
Wedge Group, Inc.
HESS TOWER
1501 McKinney Street
844,763 / 30,500 /29
100%
61,682
61,682
N/A
1.5
H&R REIT
GREENSTREET TOWER
1201 Polk Street
275,223 / 25,020 / 11
100%
194,768
194,768
$45.56
1.5
Midway Companies/
Lionstone Investments
31 3229 3330 34 35
TWO ALLEN CENTER
1200 Smith Street
995,623 / 26,613 / 36
68.8%
409,801
171,358
$45.59
1.0
Brookfield Office
Properties, Inc.
THREE ALLEN CENTER
333 Clay Street
1,194,719 / 25,000 /50
86.3%
230,395
92,453
$46.70
1.0
Brookfield Office
Properties, Inc.
TOTAL PLAZA
1201 Louisiana Street
843,533 / 24,600 / 35
96.5%
112,194
64,912
$43.17
1.0
Brookfield Office
Properties, Inc.
2826 27
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75 CLASS A OFFICE BUILDINGS
CENTRAL BUSINESS DISTRICT HOUSTON, TEXAS
JUNE 2020
*Gold and white indicators are approximate only at the time of printing and are presented to show approximate
percentage of available space by floor/building. All indicators are left-to-right and are not meant to show location
of available space.
**Rental rates listed are net + operating expenses.
194,768 SF Sublease
thru 12/2020
Direct after 12/2020
COLLIERS INTERNATIONAL
1233 West Loop South, Suite 900
Houston, TX 77027
www.colliers.com/texas
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
Available Direct Space
Central Business District
Class A Class B
Available Direct Space
Q1 2020
Class A: 7,992,089 SF or 22.8%
Class B: 3,321,011 SF or 38.9%
28
3
4
5
6
1
12
11
9
8
10
29
19
18
17
16
27
23
22
31
2628
21
14
20
15
13
24
25
32
33
34
35
30
7
2
A skyline view of available space for ten of Houston’s Class A office submarkets including the CBD, Galleria, Energy Corridor, Greenway
Plaza, NASA/Clear Lake, North Belt, Sugar Land, The Woodlands, West Belt and Westchase, is now available online.
| Now Available Online at colliers.com/houstonSkylines

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