Reuters: In bustling Houston, it's a case of 'Build, baby, build!', 2013-Aug-26 by Anna Driver and Ilaina Jonas
Brian Stoffers, president of CBRE Capital Markets, said spec building in Houston in many ways makes it an outlier.
"The dynamics of the Houston market are so robust right now that it's the exception to the economic rule around the rest of the country," he said.
Of the buildings under construction, 29 will be rentals that will not be owner-occupied. Of those, 13 broke ground without signed leases but six of those have since found tenants.
Vacancy rates in the most expensive, modern office buildings in Houston are tumbling. Second-quarter vacancy slid to 6.9 percent from 12 percent in the same period two years ago, according to CBRE. The broader office vacancy rate is 14.2 percent versus a national average of 17 percent.
While access to shale deposits has diminished worries about supplies, much of the new demand for crude oil in recent years has been led by developing nations such as China and India.
Big slowdowns in those developing economies could hit the price of crude and cool enthusiasm for building in Houston.
"If China and India have hit a plateau, then I think we have to ask where are the drivers for oil demand in the future," said the University of Houston's Robert Gilmer.