Despite more than 50” of rain across Houston and surrounding areas, after the storm, the majority of Houston’s commercial business properties seemed to have escaped damage. According to an article released September 14th, “CBRE Research estimates that of the city’s 1,200-building, 214 million-sq.-ft. total inventory, fewer than 40 buildings totaling approximately 9 million sq. ft. had some level of damage.” These are not bad odds at all considering that some areas of Houston saw up to a third of residential properties sustain water damage.
The article goes on to say that “most of the office product impacted by flooding is in four areas to the west and northwest of the CBD—West Houston, Allen Parkway, West Loop/Galleria and FM 1960/Highway 249.” With minimal water damage occurring mostly in lobbies and parking garages, many of the affected tenants will probably be looking for short-term leases to occupy until their original location is ready to move back in. This is expected to cause a decline in sublease availability in the next quarter.
While the market for office buildings seems fairly stable, the influx of aid organizations and relief workers to the area may affect the demand for available space which previously sat at 84% occupied. Check back soon for updates on the developing state of Houston’s commercial real estate market after Hurricane Harvey.