New Office Projects Rising Across Houston

HOUSTON. TX— Builders are expected to ease the tight conditions in the Houston office market his year with the delivery of more than 3 million square feet of new space, according to the 2008 National Office Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

Most of the new construction is speculative and concentrated in traditionally strong office-using districts, such as the Energy Corridor, Galleria and Westchase.

Also included in the report is the firm’s annual National Office Index (NOI), a snapshot analysis that ranks 43 office markets based on a series of 12-month forward-looking supply and demand indicators. Houston holds steady this year at No. 18.

“The investment outlook for Houston remains bright, supported by prospects for long-term economic growth and initial yields in the mid- to high-7 percent range,” says Michael E. Hoffman, (photo at right) regional manager of Marcus & Millichap’s Houston office.

Following are some of the most significant aspects of the Houston Office Research Report:

· Employment growth in Houston will remain well above the national rate, as 41,000 positions are forecast to be added this year, an increase of 1.6 percent.
· The return of speculative construction will accelerate deliveries to 3.3 million square feet, boosting office stock 2.1 percent.
· Vacancy is forecast to end the year at 12.1 percent.
· Higher rents for Class A space and relatively tight conditions will facilitate a 6.3 percent increase in marketwide asking rents to $23.60 per square foot.
· Effective rents are forecast to advance 6.7 percent to $20.68 per square foot.

In the 2008 NOI, Seattle moved up three places to secure the No. 1 spot, surpassing last year’s leader New York City, which slipped to No. 2. Boston moved up two spots to No. 3, while San Francisco jumped 12 places to the No. 4 position. Los Angeles slipped two spots, coming in at No. 5.

For a copy of Marcus & Millichap’s National Office Report and the complete NOI rankings, visit http://www.marcusmillichap.com/.

Contact:
Stacey Corso
Public Relations Manager
Marcus & Millichap
2999 Oak Road
Suite 210
Walnut Creek, CA 94597
Office: 925.953.1716
Mobile: 415.672.6460
Fax: 925.953.1710
http://www.marcusmillichap.com/