CBRE

FIGURES|HOUSTONOFFICE|Q42025

TheHoustonofficemarketin2025:Astoryof

‘haves’and‘have-nots’

26.1%

AvailabilityRate

25.2%

VacancyRate

(332,964)

SFNetAbsorption

0

SFDelivered

557K

SFUnderConstruction

▲$19.41

NNNAskingRate(Annual)

Note:Arrowsindicatechangefrompreviousquarter.

FIGURE1:HistoricalAbsorption,Deliveries,andVacancy

Sq.Ft.millionsVacancy%

0.726

0.225

(0.3)24

(0.8)23

(1.3)22

KEYHIGHLIGHTS

—BifurcationbetweenthenewestClassAandolderpropertiesremainsthedominanttrendthat

shapedtheHoustonofficemarketin2025.Whilelowerqualityassetscontinuetoloseoccupancy,

demandforClassAspacebuiltsince2015isaccelerating,drivingrentalratesabove$50.00NNNandpushingvacancyinpost-2015buildingsdownto8.5%.

—Netabsorptionendedtheyearonasofternote,dippingintotheredforthefirsttimesinceQ1.IfnotforMarathon’svacatingof440KSFat990Town&CountryafteritsacquisitionbyConocoPhillips,theQ4wouldhavereportedpositiveoccupancygrowth.Lookingaheadabsorptionisexpectedtomovepositiveinthefirstquarterof2026givenanticipatedtenantmoves.

—Q4sawaslowinginleasingactivity,hittingjustover1millionSFsignedacrossHoustonafter

severallargetransactionsweresignedinQ3.2025closedoutwith6.4millionSFinsignedleases,2millionSFbelow2024’stotal.Despitethedeclineincompletedleasevolume,touringactivitywithinthemarketremainshigh.

—Thistighteningofavailablehigh-qualityspacehasfueledanactivesubleasemarket,astenants

NetAbsorptionDeliveriesVacancyRate

strugglingtosecureClassAspacearemovingquicklytocapturedesirableoptionsassoonastheybecomeavailable.

1CBRERESEARCH?2025CBRE,INC.

FIGURES|HOUSTONOFFICE|Q42025

2CBRERESEARCH?2025CBRE,INC.

MarketOverview

ThecontinuedflighttoClassAspace–andinparticular,newconstruction-inHouston’sofficemarket

remainedoneofthemostdefiningtrendsfor2025.TenantsareoverwhelminglyfavoringClassAproperties,whichaccountedfor80%oftransactionsthisquarter.Further,demandhasbeenparticularlystrongfornewlybuiltassets,drivingrentalratesabove$50NNNandvacancyintosingledigits–8.6%attheendof2025.

ThedwindlingsupplyofTrophyspaceisreshapingthedeal-makingprocess.Tosecuretop-tierlocations,

tenantsarestartingrenewalsorsitesearchesmultipleyearsinadvanceandconsideringlongerleasetermstooffsethighbuild-outcosts.ThishascreatedanopeningforthenexttierofClassAbuildingstocapture

demandfromtenantsunabletosecureTrophyspace.Asaresult,thesepropertiesareattractinghigher-qualitytenantsandsuccessfullypushingaskingratesupwards,thoughataslowerpace.

LeasingactivityintheHoustonofficemarketslowedquarter-over-quartertojustover1millionSFsigned

amongleasesover10,000SF.ThisputsQ4leasing37%belowthe2025average.Thisdipinleasingisdue,inpart,tothelackoflargetransactionsasnoleasesexceeded100KSFinQ4.Thelargesttransactionofthe

quarterwasSimpson,Thacher&Bartlett's99,397SFsignatureonMaverick'ssubleasespaceat1000Main.

While2025closedonasofternote,marketparticipantsreportstrongtouringactivityandanticipateasurgeinsigneddealsheadingintothenewyear.

Thefourthquarterendedwith333,000SFinoccupancylosses,causingvacancytorise20basispointto

25.2%.Whilethisisadipfromtheprevioustwoquarters,thenumberdoesnotreflecttheoverallhealthofHouston'sofficemarketasitwaslargelydrivenbytwoisolatedevents:Technipvacatedfourfloorstotaling104KSFatEnergyTowerIIItorelocatetoitsownedfacilityinGenerationPark.Additionally,followingits

acquisitionbyConocoPhilips,Marathonvacatedits440KSFleaseat990Town&County,placingtheentireKatyFreewaybuildingonthesubleasemarket.

ThismoveoutcausedtheKatyFreewaysubmarkettoseethehighestnegativeabsorptionnumber,endingthequarterwith522,606oflosses.Negativeabsorptionherewillnotmanifestasatrend,asexceedinglyhigh

tenantinterestinthesubmarketremains.990Town&Countryisalready40%leasedwithanother50,000SFpending,anincrediblyfastturnaroundforabuildingthatwasvacatedatthebeginningofQ4.

Thisisnottheonlyexampleofspaceleasingupthisquarter.Aspreviouslymentioned,Simpson,ThacherandBartlettleasedandmovedintoMaverick’ssubleasespace.Additionally,175KSFofavailablesubleasespaceat9753KatyFreeway,whichhitthemarketonlyahandfulofmonthsagoisnowcurrently100%subleased.Largertenantsaretakingadvantageofmultiplefloorsubleasespaceasavailabilitywithintop-tier-classAoffice

buildingstightens.

FIGURE2:VacancyRatesbyClass

28

27

26

25

24

VacancyRate(%)

ClassAClassB

FIGURE3:LeasingActivitybySector–10,000sq.ft.andup

Energy&OilServices

LegalServices

ProfessionalServices

FinancialServices

Education

RealEstate

Engineering

Construction

6%6%

6%

11%

29%

33%

FIGURES|HOUSTONOFFICE|Q42025

3CBRERESEARCH?2025CBRE,INC.

FIGURE4:LeasingActivityTrend–10,000sq.ft.andup

Sq.Ft.millions

3.0

2.5

2.0

1.5

1.0

0.5

3.5

0.0

ClassAClassB

EconomicOverviewandCapitalMarketTrends

TheU.S.economyissendingsomemixedsignals.Financialmarketsarefocusedontheupside,

particularlyAI’ssizablecontributiontogrowthinrecentquarters.Someindicatorsofbusinessactivity,suchascapitalgoodsorders,areimproving,andstrengtheningcreditmarketsarehelpingtousherrealestateintoanewcycle.

Thepicturegetsmoremelancholywhenlookingathouseholds.Consumerconfidenceremainsweak,withspendingreportedlydrivenbyasmallersegmentofaffluenthouseholds.Thismosaicofdatasuggests

thatannualaverageGDPgrowthwillbesteadyin2026,at2%,butatouchsofterthanin2025.

Akeycatalystisasofterlabormarket,ascompaniesare‘slowtohire,slowtofire’—atrendthatislikelytolastafewquarters.Aconsequenceofthisoutlookissofterinflationandlong-termbondyieldstrendingjustbelow4%byH22026.

2.3%

KatyFreewayWestBeltWoodlandsCBD

East NorthLoopEnergyCorridorGreenwayPlaza

Westchase

FM1960/Highway249WestLoop/Galleria

FIGURE5:LeasingVolumeasaPercentageofSubmarketSize

1.4%

0.7%

1.0%

0.9%

0.4%

0.4%

0.3%

0.3%

0.2%

0.2%

FIGURE6:KeyLeasingTransactions

Tenant

SFLeased

TransactionType

Address

Submarket

SimpsonThacher&Bartlett

99,397

NewLease

1000MainSt

CBD

CaturusEnergy

90,786

NewLease

990TownandCountryBlvd

KatyFreeway

Asurion

86,917

Renewal

10720WSamHoustonPkwyN

WestBelt

Schouest,Bamdas,Soshea,BenMaier&Eastham

86,055

Renewal

1001McKinneySt

CBD

RepsolServices

81,637

Renewal

2455TechnologyForestBlvd

Woodlands

ConcordeCareerColleges

45,000

NewLease

3100HayesRd

Westchase

RegionsBank

34,042

Renewal

3773RichmondAve

GreenwayPlaza

VentureGlobal

30,965

Renewal

1401MckinneySt

CBD

DiversifiedGas&Oil

27,703

NewLease

500DallasSt

CBD

BNYMellon

26,851

NewLease

811Main

CBD

FIGURES|HOUSTONOFFICE|Q42025

4CBRERESEARCH?2025CBRE,INC.

FIGURE7:HoustonOfficeMarketStatistics

Submarket

CBD

TotalInventory(SF)

42,237,272

TotalVacancy(%)

29.2%

TotalVacancy

(SF)

12,333,283

TotalAvailability

(%)

28.5%

TotalAvailability

(SF)

12,037,622

SubleaseAvailability(SF)

1,436,067

NNNAskingRate($/PSF)

Under

Construction

(SF)

Deliveries(SF)

NetAbsorption

(SF)

107,900

2025NetAbsorption(SF)

(166,070)

$26.26

-

-

ClassA

33,070,993

28.0%

9,259,878

28.2%

9,326,020

1,091,343

$27.57

-

-

127,287

(122,132)

ClassB

8,675,181

35.1%

3,044,988

30.3%

2,628,580

329,657

$19.58

-

-

(20,729)

(60,200)

ClearLake

5,691,939

16.2%

922,094

22.7%

1,292,070

130,915

$16.56

-

-

(86,087)

(80,695)

ClassA

1,710,683

21.4%

366,086

19.6%

335,294

25,660

$18.54

-

-

(21,623)

(21,774)

ClassB

3,108,554

15.5%

481,826

28.3%

879,721

105,691

$16.01

-

-

(51,197)

(61,202)

East

2,245,990

15.5%

348,128

12.6%

282,995

8,984

$16.60

-

-

(6,309)

40,806

ClassA

340,122

10.9%

37,073

6.4%

21,768

-

$10.25

-

-

546

59,882

ClassB

1,457,272

15.0%

218,591

15.1%

220,048

10,201

$17.15

-

-

(6,855)

(17,117)

EnergyCorridor

21,498,546

21.3%

4,579,190

25.2%

5,417,634

601,959

$17.49

-

-

(95,422)

291,721

ClassA

16,048,274

20.1%

3,225,703

23.8%

3,819,489

561,690

$20.77

-

-

(65,969)

364,912

ClassB

4,841,039

25.2%

1,219,942

30.4%

1,471,676

29,046

$13.51

-

-

(1,157)

(35,915)

FarWest

1,775,003

13.0%

230,750

12.4%

220,100

35,500

$21.62

-

-

(1,759)

(127,303)

ClassA

918,354

17.5%

160,712

22.5%

206,630

35,816

$22.33

-

-

(1,578)

(130,529)

ClassB

738,214

8.5%

62,748

1.0%

7,382

-

$20.76

-

-

-

-

FM1960/Highway249

6,794,063

24.4%

1,657,751

38.0%

2,581,744

482,378

$13.72

-

-

(9,612)

9,661

ClassA

2,530,259

18.3%

463,037

57.7%

1,459,959

463,037

$18.05

-

-

(35,577)

16,866

ClassB

3,729,530

27.1%

1,010,703

25.1%

936,112

18,648

$11.44

-

-

23,846

15,618

GreenwayPlaza

10,349,595

25.7%

2,659,846

28.0%

2,897,887

155,244

$22.18

146,003

-

7,035

(12,476)

ClassA

6,325,153

26.7%

1,688,816

28.9%

1,827,969

107,528

$24.27

146,003

-

42,566

63,480

ClassB

3,173,754

25.6%

812,481

30.0%

952,126

44,433

$19.40

-

-

(33,942)

(68,983)

InnerLoop

5,451,854

19.1%

1,041,304

22.1%

1,204,860

212,622

$21.65

103,381

-

(87,585)

(175,049)

ClassA

3,387,971

22.5%

762,293

25.3%

857,157

155,847

$22.32

103,381

-

(76,246)

(138,714)

ClassB

1,884,353

14.1%

265,694

17.7%

333,530

54,646

$19.54

-

-

(11,339)

(36,335)

KatyFreeway

7,130,283

15.1%

1,076,673

14.5%

1,033,891

163,997

$30.63

308,000

-

(522,606)

(473,846)

ClassA

5,619,804

15.6%

876,689

14.5%

814,872

151,735

$37.00

308,000

-

(453,213)

(424,556)

ClassB

690,292

10.8%

74,552

10.8%

74,552

2,071

$26.06

-

-

(42,168)

(38,552)

Kingwood

909,062

11.7%

106,360

9.5%

86,361

6,363

$10.70

-

-

(9,188)

(6,539)

ClassA

536,758

7.8%

41,867

6.2%

33,279

-

$11.11

-

-

(4,610)

3,434

ClassB

259,254

23.2%

60,147

18.7%

48,480

6,481

$10.08

-

-

(4,578)

(6,069)

North

7,229,455

7.0%

506,062

7.3%

527,750

79,524

$17.23

-

-

94,150

(7,527)

ClassA

5,731,663

5.1%

292,315

4.8%

275,120

17,195

$23.73

-

-

89,998

40,630

ClassB

1,425,943

14.9%

212,466

17.4%

248,114

61,316

$14.17

-

-

1,999

(50,310)

NorthBelt

11,145,257

41.4%

4,614,136

36.7%

4,090,309

100,307

$10.05

-

-

21,925

(137,780)

ClassA

4,358,875

42.4%

1,848,163

42.0%

1,830,728

43,589

$12.98

-

-

16,694

(3,413)

ClassB

5,089,083

49.0%

2,493,651

39.3%

2,000,010

50,891

$7.77

-

-

11,286

(106,595)

FIGURES|HOUSTONOFFICE|Q42025

5CBRERESEARCH?2025CBRE,INC.

Source:

FIGURE8:HoustonOfficeMarketStatistics(continued)

Submarket

NorthLoop

TotalInventory(SF)

7,676,745

TotalVacancy(%)

18.0%

TotalVacancy

(SF)

1,381,814

TotalAvailability

(%)

17.4%

TotalAvailability

(SF)

1,335,754

SubleaseAvailability(SF)

15,353

NNNAskingRate($/PSF)

Under

Construction

(SF)

Deliveries(SF)

NetAbsorption

(SF)

(40,774)

2025NetAbsorption(SF)

(34,806)

$13.07

-

-

ClassA

1,842,943

21.7%

399,919

22.1%

407,290

1,843

$15.09

-

-

(9,709)

44,542

ClassB

4,552,373

19.4%

883,160

18.3%

833,084

13,657

$11.96

-

-

(24,488)

(73,582)

SouthMain/MedicalCenter

4,295,945

10.9%

468,258

14.5%

622,912

68,735

$18.29

-

-

(8,560)

(39,962)

ClassA

-

-

-

-

-

-

-

-

-

-

-

ClassB

3,036,361

10.8%

327,927

15.3%

464,563

69,836

$19.80

-

-

(5,965)

(43,250)

SouthwestFreeway

7,074,106

21.1%

1,492,636

19.4%

1,372,377

49,519

$13.60

-

-

963

(76,291)

ClassA

-

-

-

-

-

-

-

-

-

-

-

ClassB

3,006,087

27.6%

829,680

28.3%

850,723

45,091

$14.11

-

-

(5,340)

(66,280)

SugarLand

4,113,523

26.9%

1,106,538

25.8%

1,061,289

16,454

$20.17

-

-

(43,220)

(85,328)

ClassA

2,476,060

36.6%

906,238

36.3%

898,810

14,864

$21.78

-

-

(35,694)

(97,897)

ClassB

1,202,907

14.2%

170,813

10.5%

126,305

-

$14.40

-

-

(4,535)

7,148

WestBelt

6,278,168

27.3%

1,713,940

32.6%

2,046,683

395,525

$16.91

-

-

(5,875)

122,823

ClassA

3,598,860

27.8%

1,000,483

32.7%

1,176,827

291,508

$17.25

-

-

(1,690)

187,538

ClassB

2,501,953

26.1%

653,010

32.8%

820,641

100,078

$16.48

-

-

(519)

(48,949)

WestLoop/Galleria

30,443,321

29.7%

9,041,666

27.6%

8,402,357

426,206

$21.13

-

-

222,795

462,123

ClassA

18,200,931

31.2%

5,678,690

28.3%

5,150,863

382,220

$25.75

-

-

258,050

541,630

ClassB

9,407,595

29.8%

2,803,463

29.6%

2,784,648

28,223

$14.56

-

-

(29,303)

(86,998)

Westchase

18,776,036

32.1%

6,027,108

34.9%

6,552,837

957,578

$16.01

-

-

70,079

(255,915)

ClassA

7,364,567

27.1%

1,995,798

30.6%

2,253,558

184,114

$21.28

-

-

30,507

(212,857)

ClassB

8,810,324

37.7%

3,321,492

40.3%

3,550,561

616,723

$13.40

-

-

40,697

(9,657)

Woodlands

8,204,882

18.6%

1,526,108

19.1%

1,567,132

262,556

$27.65

-

-

19,763

241,667

ClassA

6,397,066

18.5%

1,183,457

19.6%

1,253,825

262,280

$31.55

-

-

7,998

145,747

ClassB

1,550,498

20.4%

316,302

19.0%

294,595

-

$19.10

-

-

2,538

80,256

SuburbanTotal

167,083,773

24.2%

40,434,273

25.5%

42,606,362

4,177,094

$17.52

557,384

-

(480,287)

(344,716)

ClassA

87,388,343

23.9%

20,885,814

25.9%

22,633,581

2,709,039

$22.03

557,384

-

(259,550)

438,921

CBREResearchQ12025

ClassB

60,465,386

26.8%

16,204,723

28.0%

16,930,308

1,269,773

$13.61

-

-

(141,020)

(646,772)

HoustonTotal

209,437,792

25.2%

52,778,324

26.1%

54,663,264

5,654,820

$19.41

557,384

-

(332,964)

(470,315)

ClassA

120,508,453

25.1%

30,247,622

26.5%

31,934,740

3,735,762

$23.84

557,384

-

(92,840)

356,212

ClassB

69,208,197

27.9%

19,309,087

28.3%

19,585,920

1,591,789

$14.14

-

-

(161,749)

(705,924)

Note:ClassCinventoryisalsotrackedandincludedintotalsbutnotshownseparatelyinthistable.

FlGURES|HOUSTONOFFlCE|Q42025

MarketAreaOverview

Definitions

AvailableSq.Ft.:Spaceinabuilding,readyforoccupancywithinsixmonths;canbeoccupiedorvacant.AvailabilityRate:Total

AvailableSq.Ft.dividedbythetotalbuildingArea.AverageAskingLeaseRate:Acalculatedaveragethatincludesnetleaserate,weightedbytheircorrespondingavailablesquarefootage.BuildingArea:Thetotalfloorareasq.ft.ofthebuilding,typicallytakenatthe“dripline”ofthebuilding.GrossActivity:Allsaleandleasetransactionscompletedwithinaspecifiedtimeperiod.Excludesinvestmentsaletransactions.GrossLeaseRate(ifreferenced):Renttypicallyincludesrealpropertytaxes,buildinginsurance,andmajormaintenance.NetAbsorption:ThechangeinOccupiedSq.Ft.fromoneperiodtothenext.NetLeaseRate:Rentexcludesoneormoreofthe”net”costs(realpropertytaxes,buildinginsuranc