Q4 2013 | OFFICE MARKET

THE WOODLANDS

RESEARCH & FORECAST REPORT

The Woodlands Office Market
Q4 2013 OFFICE MARKET INDI...
RESEARCH & FORECAST REPORT | Q4 2013 | THE WOODLANDS
The average quoted rental rates are a mix of direct and sublet rates ...
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The woodlands Q4 2013 Office Market Snapshot

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The woodlands Q4 2013 Office Market Snapshot

  1. 1. Q4 2013 | OFFICE MARKET THE WOODLANDS RESEARCH & FORECAST REPORT The Woodlands Office Market Q4 2013 OFFICE MARKET INDICATORS THE WOODLANDS CLASS A CLASS B NET ABSORPTION VACANCY RENTAL RATE CONSTRUCTION NEW SUPPLY Q4 2013 OFFICE MARKET HIGHLIGHTS THE WOODLANDS • The Woodlands Area Chamber of Commerce leased 18,000 SF in Research Forest Lakeside and is expected to move-in July 2014. • ExxonMobil announced plans to occupy about 480,000 SF in Hughes Landing. The buildings are expected to be complete in Q4 2015. The Woodlands submarket, one of Houston’s top suburban office submarkets, saw a flurry of activity in 2013 and that momentum continues into the new year. The Woodlands office submarket contributed 33.1% of Houston’s Q4 2013 total suburban positive net absorption and 35.5% of the 2013 total, which is impressive since the submarket has only a 4.1% share of Houston’s suburban office inventory. Leasing activity has been key to the year-end positive net absorption of 1.1M square feet. Vacancy in the submarket decreased 250 basis points to 6.4% from 8.9% in Q3 2013. Expansion in the energy sector has spurred demand for office space in Houston and The Woodlands submarket, which is quickly becoming the newest Energy Corridor. Developers have responded by planning and starting new projects. ExxonMobil’s 3.5 million SF north Houston campus just south of The Woodlands is well underway and has fueled development of retail, single-family, multi-family, hotel, and other office projects in the area. Office development is progressing rapidly at Hughes Landing on Lake Woodlands. One Hughes Landing is completed and 98% leased, Two Hughes Landing will be completed in April 2014 and Three Hughes Landing is projected to break ground later this year. Further, Anadarko’s second tower in The Woodlands delivered at the end of the fourth quarter. The Houston metropolitan area added 86,200 jobs between November 2012 and November 2013, an annual increase of 3.1% over the prior year’s job growth. Local economists have forecasted 2014 job growth to remain steady, adding between 68,000 and 72,000 jobs. Further, Houston’s unemployment fell to 5.6% from 5.8% one year ago. Houston area home sales increased 19.4% between November 2012 and November 2013. With continued expansion in the energy industry and a strong housing market, The Woodlands submarket is expected to remain healthy for the near and long-term. Absorption, New Supply and Vacancy Rates Woodlands Class A Office 700,000 Net Absorption 600,000 500,000 400,000 300,000 200,000 100,000 0 -100,000 www.colliers.com/thewoodlands New Supply Vacancy Absorption, New Supply and Vacancy Rates Woodlands Class B Office 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% -2.00% 200,000 Net Absorption New Supply Vacancy 20.00% 18.00% 150,000 100,000 50,000 0 -50,000 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% -100,000 -2.00%
  2. 2. RESEARCH & FORECAST REPORT | Q4 2013 | THE WOODLANDS The average quoted rental rates are a mix of direct and sublet rates and are based on a mix of gross and NNN. The graphs below are only intended to show rental rate trends. Actual gross rates are higher than the average rate shown in the graph. Colliers International Statistics Revenues: Historical Average Quoted Rental Rates Woodlands Class A Office $2.0 Billion Countries: 62 Offices: 482 Professionals: 13,500 Brokers: Class A Rental Rates $45.00 Square Feet Managed: $40.00 Lease/Sale Transactions: $35.00 Total Transaction Value: 5,100 1.12 Billion* 78,000 $71 Billion $30.00 $25.00 (Based on 2012 results.) $20.00 *The combination of Colliers International and FirstService results in 2.515 Billion under management - 2nd largest in the world. $15.00 $10.00 $5.00 $0.00 Historical Average Quoted Rental Rates Woodlands Class B Office Class B Rental Rates $25.00 Lisa Bridges Director of Market Research | Houston Direct +1 713 830 2125 Lisa.Bridges@colliers.com $20.00 $15.00 Colliers International | Houston 1233 W. Loop South Suite 900 Houston, TX 77027 United States www.colliers.com/houston $10.00 $5.00 $0.00 Colliers International | The Woodlands 24 Waterway Suite 630 The Woodlands, TX 77380 United States www.colliers.com/thewoodlands Woodlands Submarket Map 1488 Res ear ch For est Wo o Par dlands kwa y Needham Rd. Gro Huffsmith-Kohrville 1314 ’s M gan d. ill R Spring Stuebner www.colliers.com/houston/houston/houston To Houston CBD P. 2 | COLLIERS INTERNATIONAL Gosling Rd. hl da en yk Ku 2920 249 242 Accelerating success.

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