You might think it’s New York or Los Angeles, but Houston and Dallas actually have more empty offices than anywhere else in the country.
It’s a problem that could get worse and impact us all. The National Association of Realtors said one in five offices are empty in Houston.
“I do see those, especially in the downtown area, with the vacancies,” Kasi Vandha said.
“Some companies offer working from home,” David Xu said. “There’s less space right now.”
When it comes to office vacancies, the NAR said Houston and Dallas are at the top, at nearly 20%.
The two Texas cities are ranked higher than San Francisco, 16%; Chicago, 15%; LA, 14%; and NYC, 12%.
“I’m a bit surprised by that,” Juana Collins said. “I thought the percentage was lower for Houston than it was for some of the other cities.”
Experts said it’s because it’s cheaper to build in Texas than in other states.
“Maybe they’re anticipating faster job creation compared to the rest of the country,” National Association of Realtors chief economist Lawrence Yun explained. “More people are moving into the region, and they want to be prepared for all these incoming people.”
This means there’s more supply with less demand. Experts said remote work is keeping people home.
“Retail, warehouses, apartments, the vacancy rate is falling, but in the office, it’s still rising despite the job creation,” Yun said.
Empty offices could impact us all because if developers can’t pay back loans, it could trickle down to other items, according to Yun.
“Once the local community banks become a little wobbly financially because of the high office vacancy rate, then you are looking into the lending into other sectors may have to be restrained and hurting the local economy,” Yun said.
Yun expects the occupancy rate to get worse with remote work. Because of this, he says don’t be surprised if you see offices turned into apartments or schools as a way to remove lease signs.
