NASA/Clear Lake Office Submarket
by Kevin Nolan, Moody Rambin Interests

The NASA / Clear Lake office market consists of 6.5 million square feet of office space in 125 existing buildings, representing 3% of the Greater Houston office supply. We have seen increased investor interest in this sub-market and about 200,000 square feet of new inventory since the beginning of 2000. In 2000, the Clear Lake Market absorbed 521,125 square feet, for a positive net absorption of 24,119 square feet. The first quarter of 2001 has seen 186,685 square feet of space leased for a positive net absorption of 61,276 square feet. 103,471 square feet of the leasing activity in the first quarter was seen in Class A space with more large deals expected by the end of the year. With the existing hi-tech labor force and the growing fiber optic backbone, biomedical and telecommunications companies continue to show a great deal of interest in the area.

The overall occupancy rate for all building classes in the Clear Lake Area is currently 84.32%, down 26% from the last quarter of 2000. Class A occupancy is 67.37%, up from 58.66% last quarter. Most of the vacancy reflected in Class A space is concentrated in large non-divisible contiguous blocks. There are very few small spaces available in this class. Class B occupancy has also gone up to 90.73%, a 35% increase from the end of 2000. We saw a drop in Class C buildings, with a current occupancy rate of 81.94%, down 2.16% from last quarter.

The average rental rate for the Clear Lake Market at the end of the first quarter of 2001 is $14.27, down from $14.54 at the end of 2000. The Class A average rate has gone up to $19.08 from $18.90 at the end of 2000, with $21.00 as the highest quoted rate in the market. The Class B office market saw a decrease in the first quarter of 2001, with the current average rate of $15.16, down from $15.37 last quarter. Class C rates have risen to $12.83, up from $12.41 last quarter.

The existing medical professional buildings in the area maintained an occupancy rate close to 100% throughout the year 2000. This has brought medical developers to the area, bringing new space on line near both of the regional hospitals in the Clear Lake Market. Fueled by an anchor tenant, a 19,500 square foot medical building is being built near Clear Lake Columbia Hospital. It is near 60% pre-leased with a phase two planned. Near St. John Hospital, in Nassau Bay, a 55,000 square foot professional building is being pre-leased and is near 80% according to the developer. Rates in these projects are around $22.00 per square foot.

All indicators show that the Clear Lake sub-market should remain stable through 2001. "We continue to be delighted with the Clear Lake area office market activity. We believe this is due to the continued strong economy and enhanced by the significant number of small and growing high tech companies," said Laura Van Ness, vice president-marketing of the Clear Lake Area Economic Development Foundation.

Close Window

Copyright © 2001 - rednews.com - All Rights Reserved 5909 West Loop South, Suite 135, Bellaire, TX 77401 / info@rednews.com / (713) 661-6300