Recent low oil prices have severe consequences on cities whose economies rely on the energy industry in great proportion. The economic instability boils over to the increasingly empty office space.
In Houston, the latest oil city to be hit, the real estate service company Savills Studley reports that companies are impatient to sublet the space they’ve leased because of the severe drop in the business recently. In the fourth quarter of 2015, the available sublease space in the city reached 7.6 million square feet, up from 4.5 million square feet in the same period in 2014.
Occupancy in office space in the same period climbed to 23.2 percent from 17.8 percent in the fourth quarter of 2014, making it far higher than the 16.2 percent vacancy rate nationwide. As consequence, new office building plans are on hold and will stay on hold even if oil prices begin to increase, simply because new office space isn’t developed until builder know they can fill it...Oil Price Drop Affects Houston Office Vacancies
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National Office Sector Report (Q4 2015)