Since that time, absorption has dropped off – mainly due to the general tightness of the class A market. As available space in the submarket dried up, absorption fell due to a lack of supply rather than demand. The CBD experienced record high occupancy levels during the robust performance period, which began in 1997. Recent occupancy levels have begun to taper and slow, reflecting the softer demand brought by a colder economic climate, rather than any addition of new supply. Soon rebounding into the upper 80s and lower 90s as the U.S. economy began its longest expansion in history

The below graph shows that asking rents work in harmony with the performance of the CBD occupancy levels, often trailing rebounding demand by 12 months. Due to softer market conditions expected during the next 12 months, or the short-term forecast, rents will soon peak and begin to pull back from their historic highs. As a result of the renaissance downtown, developers have renovated and begun construction on a number of office towers.

Nevertheless, recent economic conditions have caused the local economy to cool and as such, the CBD occupancy rate is expected to drop due to both lower demand (for example. Enron’s collapse) at the same time as new supply comes on-line. It is important to hire real estate conveyancers if you are planning to sell your property at auction. Southwest Bank of Texas was one of the first tenants to occupy the 219,051 square foot property, which is currently 63 percent occupied. Another property that recently underwent extensive renovations is Travis Tower, located at 1301 Travis. Also known as 1000 Main, Reliant Resources Plaza will add nearly 800,000 square feet of speculative space to the CBD’s inventory within the first few months of 2003.

For the first time in over a decade, Houston has more office space under construction in its CBD than in the suburbs. Located at 1801 Main, the 14-story Renaissance Tower reopened its doors after a long awaited redevelopment during the first quarter. Reliant Resources, an affiliate of Reliant Energy, has leased the majority of the 37-story project, which is currently 77.6 percent leased. Hines has announced plans to begin construction at 717 Texas this August on a 32-story property that has been named after its lead tenant, Calpine Corporation.

The 689,000 square foot tower is currently 43.5 percent leased and is scheduled to complete late 2003. While large blocks become vacant in one building, others are absorbed somewhere else.