Key Takeaways

Office

The Woodlands
24Q1
• Activity levels slow
• Net absorption down
• No construction or deliveries
• Please see page 2 for report revisions

YOY YOY Under YOY Overall Asking Lease YOY

Vacancy Rate Net Absorption Construction Rates (FSG)

18.5% FORECAST (147.1K) SF FORECAST

0 SF FORECAST
$30.26 FORECAST

Highlights
The first-quarter vacancy rate rose to 18.5%, 120 basis points (BPS) up from the prior quarter and 60 BPS up year-over year. The
rate appears favorable when compared to metro Houston’s 26.7% and the Houston CBD’s 30.8% for first quarter. Net absorption
fell in the first quarter to a negative 147,088 SF, which is attributed to several contractions including U.S. Oncology, who moved
out of 200,000 SF in 10101 Woodloch Forest and into 26,530 SF in The Woodlands Towers at The Waterway. Leasing activity also
slowed this quarter, while there were no buildings delivered, started or under construction. Average weighted asking rental rates
decreased to $30.26 PSF but are up 2.0% year-over year. Similarly, the Class A weighted average rental rates dipped to $35.92
PSF, although direct asking gross rates average $42.12 PSF, ranging from $30 PSF to $55 PSF in the 40 Class A buildings.

Market Indicators Market Fundamentals

4.6% 1.5% $84 ϲϬϬ͕ϬϬϬ Ϯϱ͘Ϭй
Houston Houston annual WTI Spot Price,
Unemployment % change in U.S. benchmark
ϰϬϬ͕ϬϬϬ
Rate employment for light sweet ϮϬ͘Ϭй
crude
Historic Comparison ϮϬϬ͕ϬϬϬ
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23Q1 23Q4 24Q1 Ϭ

Total Inventory ϭϬ͘Ϭй

12,136.6 12,136.6 12,136.6
(in Thousands of SF) ;ϮϬϬ͕ϬϬϬͿ

New Supply
0.0 0.0 0.0 ϱ͘Ϭй
(in Thousands of SF) ;ϰϬϬ͕ϬϬϬͿ

Net Absorption
103.4 13.1 (147.1)
(in Thousands of SF) ;ϲϬϬ͕ϬϬϬͿ Ϭ͘Ϭй
Yϭ YϮ Yϯ Yϰ Yϭ YϮ Yϯ Yϰ Yϭ YϮ Yϯ Yϰ Yϭ YϮ Yϯ Yϰ Yϭ YϮ Yϯ Yϰ Yϭ
ϮϬϭϵ ϮϬϮϬ ϮϬϮϭ ϮϬϮϮ ϮϬϮϯ ϮϬϮϰ
Overall Vacancy 17.9% 17.3% 18.5%
EĞƚďƐŽƌƉƚŝŽŶ EĞǁ^ƵƉƉůLJ dŽƚĂůsĂĐĂŶĐLJ
Under
Construction 0.0 0.0 0.0
(in Thousands of SF)
Overall Asking The Woodlands office market started the year slowly with no properties
$29.66 $30.41 $30.26 delivered or under construction. Net absorption turned to a negative
Lease Rates (FSG)
147,088 square feet, driving the total vacancy to a 1.2% increase.
Source: CoStar

Recent Transactions
*Colliers Transaction

Lease Lease Lease* Lease*

1725 Hughes Landing Blvd 9950 Woodloch Forest Dr 24624 Interstate 45 2002 Timberloch Place
The Woodlands | 28.2K SF The Woodlands | 27.2K SF The Woodlands | 14.4K SF The Woodlands | 6.2K SF
 The Woodlands | Q1 2024 | Office | Market Statistics
Total Direct Sublease Total Previous Net Net Avg Direct
Submarket/ Inventory Availability Availability Availability Vacancy Vacancy Absorption Absorption Under Deliveries Asking Rate
Class SF Rate Rate Rate Rate Rate Current YTD Construction YTD (FSG)

The Woodlands

A 8,719,980 16.8% 4.9% 21.7% 18.1% 16.3% (157,830) (157,830) 0 0 $35.92

B 3,315,076 24.9% 1.3% 26.2% 19.7% 20.0% 10,742 10,742 0 0 $26.51

C 101,520 12.6% 0.0% 12.6% 12.6% 12.6% 0 0 0 0 -

TOTAL 12,136,576 19.0% 3.9% 22.8% 18.5% 17.3% (147,088) (147,088) 0 0 $30.26

Houston CBD

A 31,819,921 31.3% 2.9% 34.1% 27.1% 26.6% 132,489 132,489 0 386,323 $44.56

B 8,358,943 47.8% 0.5% 48.3% 45.6% 44.9% (61,740) (61,740) 0 0 $27.18

C 414,848 8.9% 0.0% 8.9% 19.8% 20.4% 2,379 2,379 0 0 $0.00

TOTAL 40,593,712 34.5% 2.4% 36.7% 30.8% 30.4% 73,128 73,128 0 386,323 $39.27

Houston Metro

A 121,064,402 28.5% 3.8% 31.7% 27.0% 26.5% (241,377) (241,377) 157,437 418,523 $35.64

B 74,290,784 27.8% 1.6% 29.4% 28.2% 27.8% (334,959) (334,959) 57,000 0 $22.68

C 9,399,538 12.1% 0.0% 12.1% 10.4% 9.9% (40,063) (40,063) 0 0 $17.95

TOTAL 204,754,724 27.5% 2.8% 30.0% 26.7% 26.2% (616,399) (616,399) 214,437 418,523 $30.31

2024 REPORT REVISIONS

The Woodlands office market report for Q1 2024 reflects a significant change. Colliers now includes statistics on competitive, general-purpose, multi- and single-tenant
office buildings 20,000 square feet or greater, excluding buildings 75% or more occupied by the owner. Due to this revision,direct comparisons to prior published editions
of The Woodlands office market report will be challenging.

Submarket Map
Willis
149 105 Lake
Conroe
Cleveland
105

Conroe 105

149

1488
1488
242
Re Needham Rd
s
Fo earc 242
Magnolia re
st h
1488 321 Wo
The Woodlands od
Par lands
kwa
Tomball y
2920

2920
Huffsmith-Kohrville

Waller 2920 Spring Dayton

Kingwood
Hockley 1314

G
ro
Humble

Gosling Rd

ga
Cypress

n’s
Atascocita

M
ill
IAH Lake

Rd
Houston
Ku
yk

Crosby
en
da

2920
hl

Spring Stuebner
Mont Belvieu
249

Katy

To Houston CBD
Brookshire
330

CBD Ship
Channel Baytown
Bellaire 225
Trinity Bay
Texas Houston Pasadena
La Porte The Woodlands
146

HOU

Sugar Land EFD Clear Lake

Richmond Pearland

35

League City

Alvin Galveston Bay

Texas
City

Hitchcock

Galveston

Gulf of Mexico

FOR MORE INFORMATION

Patsy Fretwell William Uhalt Copyright © 2024 Colliers

The information contained herein has been obtained from sources
Research Director Research Manager deemed reliable. While every reasonable effort has been made to
Houston Houston ensure its accuracy, we cannot guarantee it. No responsibility is
assumed for any inaccuracies. Readers are encouraged to consult
+1 713 830 2125 +1 713 830 2137 their professional advisors prior to acting on any of the material
patsy.fretwell@colliers.com william.uhalt@colliers.com contained in this report.