1. RESEARCH & FORECAST REPORT
THE WOODLANDS
www.colliers.com/houston
The Woodlands Office Market
The Woodlands submarket, one of Houston’s top suburban office submarkets, saw a
flurry of activity in 2012 and that momentum has continued during 2013. The Woodlands
office submarket contributed 12% of Houston’s 2012 total suburban positive net
absorption and 20% year-to-date 2013, which is impressive since the submarket has
only a 4.4% share of Houston’s suburban office inventory. Leasing activity has been key
to the year-to-date positive net absorption of 416,737 square feet. Although vacancy
in the submarket increased over the quarter to 8% from 2% due to the delivery of new
inventory, the increased demand for space will ease the vacancy rate back down below
5% by year end.
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. Further, Anadarko’s second tower in The Woodlands is also under
construction and is expected to be completed in February 2014. The Office development
is progressing rapidly at Hughes Landing on Lake Woodlands. With One Hughes Landing
completed and 96% leased, and Two Hughes Landing topped out, pre-leasing is now
underway for Three Hughes Landing.
An important driver of these market trends has been a healthy economic climate
conducive to increased business activity. The Houston metropolitan area added 80,700
jobs between August 2012 and August 2013, an annual increase of 3.0% over the prior
year’s job growth. Further, Houston’s unemployment fell to 6.1% from 6.9% one year
ago, and Houston area home sales increased significantly between May and August,
2013, up 16.2%.
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.
Q3 2013 OFFICE MARKET INDICATORS
THE WOODLANDS
Q3 2013 OFFICE MARKET HIGHLIGHTS
THE WOODLANDS
• Strike, LLC leased 70,190 SF in One
Hughes Landing and is expected to
move-in early 2014.
• Spartan Energy leased 12,000 SF of
office space in Market Street. The
company will move from its currently
location at 24 Waterway Avenue by
the first of 2014.
CLASS A CLASS B
NET ABSORPTION
VACANCY
RENTAL RATE
CONSTRUCTION
NEW SUPPLY
Q3 2013 | OFFICE MARKET
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
-100,000
0
100,000
200,000
300,000
400,000
500,000
600,000
Net Absorption New Supply Vacancy
Absorption, New Supply and Vacancy Rates
Woodlands Class A Office
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
(100,000)
(50,000)
0
50,000
100,000
150,000
200,000
Net Absorption New Supply Vacancy
Absorption, New Supply and Vacancy Rates
Woodlands Class B Office

2. Woodlands Submarket Map
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
Class A Rental Rates
Historical Average Quoted Rental Rates
Woodlands Class A Office
Colliers International
Statistics
Revenues: $2.0 Billion
Countries: 62
Offices: 482
Professionals: 13,500
Brokers: 5,100
Square Feet Managed: 1.12 Billion*
Lease/Sale Transactions: 78,000
Total Transaction Value: $71 Billion
(Based on 2012 results.)
*The combination of Colliers International
and FirstService results in 2.515 Billion under
management - 2nd largest in the world.
www.colliers.com/houston/houston/houston
Accelerating success.
Lisa R. Bridges
Director of Market Research | Houston
Direct +1 713 830 2125
lisa.bridges@colliers.com
Colliers International
1300 Post Oak Boulevard
Suite 200
Houston, TX 77056
United States
www.colliers.com
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
Class B Rental Rates
1488
2920
249
1314
242
Huffsmith-Kohrville
WoodlandsParkway
ResearchForest
Needham Rd.
Grogan’sMillRd.
Spring Stuebner
GoslingRd.
Kuykendahl
ToHoustonCBD
Historical Average Quoted Rental Rates
Woodlands Class B Office
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.
P. 2 | COLLIERS INTERNATIONAL
RESEARCH & FORECAST REPORT | Q3 2013 | THE WOODLANDS