Zaya Younan and Industry Experts Forecast Significant Recovery for National Office Market

National Trends Indicate Robust Turnaround especially in some major cities like Houston

/EIN News/ -- Los Angeles, CA, May 19, 2025 (GLOBE NEWSWIRE) -- Zaya Younan, CEO of Younan Properties, along with industry analysts, have projected a substantial recovery for the national office market, bolstered by compelling recent market data reflecting growing optimism.

Recent data from Cushman & Wakefield highlights that national office leasing surged to 115 million square feet in Q1 2025, marking a significant 35% increase over the previous quarter and the highest quarterly total since 2019. Additionally, the national office vacancy rate has declined from its peak of nearly 20% to 14.8% for class A buildings, demonstrating improving market conditions and increasing tenant confidence.  Keeping in mind that pre-pandemic in 2019 class A office building vacancy was at 11.5%.  Per JLL leasing volume reached 50.4 million square feet in the first quarter of 2025, a 15% increased to Q1 2024, indicating a rebound to 89% of pre-pandemic levels. CBRE data shows the U.S. Office market recorded 2.3 million square feet of positive net absorption, marking the fourth consecutive quarter of rising tenant demand.

Moreover, rental rates, which had been stagnant for several years, have started to climb nationally, registering a 3.5% year-over-year growth as reported by JLL, indicating a clear shift toward market recovery. Office building sales volume reached $63.6 billion in 2024, reflecting a notable 20% increase from the prior year, underscoring renewed investor confidence.

Houston, Texas, is among the most dynamic and resilient office markets in the country, with its Energy Corridor emerging as a leading submarket.  Positive Momentum Accelerates in Houston in the last 4 quarters.   Houston’s office market has mirrored these national improvements. Colliers International reports that Houston leased approximately 1.5 million square feet of office space in the last quarter alone, achieving a significant decrease in city-wide vacancy rates by nearly 100 basis points. Rental rates have also risen modestly by 2.8% year-over-year, marking a clear reversal from previous declines. One of the key drivers behind the rapid rebound of Houston’s office market—particularly the Energy Corridor—is the significant migration of tenants relocating from other submarkets within the city. This internal migration, combined with an influx of companies from states such as New York and California, has accelerated growth in the area. Businesses are increasingly attracted to Houston’s favorable business climate, lower cost of living, exceptional quality of life, and supportive local government policies. Collectively, these factors have significantly boosted demand not only in the Energy Corridor but across Houston’s broader office market, fueling sustained positive momentum.

"You simply cannot ignore the compelling recent data emerging from the office market, specifically in major cities. It’s time we stop looking in the rearview mirror—focusing only on past struggles—and instead direct our full attention forward. Much like driving on the freeway, constantly glancing backward risks disaster ahead. The latest figures unmistakably demonstrate significant improvements across major office markets nationwide. Anyone reviewing this data objectively must acknowledge that we have clearly turned a critical corner toward sustained recovery and renewed growth. The resurgence in leasing and rental rates demonstrates a notable rebound,” said Zaya Younan. “The Houston market, in particular, is seeing renewed enthusiasm from investors and tenants alike.”

Houston’s Energy Corridor Leads Submarket Performance.

The Energy Corridor has emerged as Houston’s standout submarket, showcasing superior performance compared to other local sectors. In the last 18 months, Two Westlake Park, located at 580 Westlake Park Blvd, has secured an exceptional 185,000 square feet of new leases—the highest positive absorption recorded within this area. This remarkable leasing activity contributes significantly to the overall 300,000 square feet of positive net absorption recorded in the Energy Corridor for Q4 2024 alone.

This submarket hosts prominent headquarters and significant operations for industry-leading corporations including BP, Shell, ConocoPhillips, McDermott International, TechnipFMC, Wood Group, Citgo, and a substantial presence from major banks and financial institutions. These robust corporate presences underpin the Energy Corridor’s continued attractiveness and stability.

Renovations and modernizations, such as those at Energy Tower II, have attracted large-scale leases like the recent 46,000-square-foot lease signed by a prominent engineering firm, further driving positive market dynamics.

Future Outlook Brightens.

Younan, alongside other industry experts, expects sustained positive trends throughout 2025 and beyond. Forecasts suggest continued improvement in leasing activities, decreasing vacancy rates, rising rental rates, and elevated investment interest, particularly in high-quality office spaces within key markets such as Houston’s Energy Corridor.

“We’re witnessing clear signs of recovery nationally and locally, particularly within Houston’s premier submarkets,” Younan concluded. “These indicators strongly suggest that the office market has indeed turned the corner toward robust and sustained growth.”

About Younan Properties

Younan Properties, owned by Younan Company, is a leading international commercial real estate investment, development, and management firm specializing in high-quality, high-rise office properties throughout the United States and Europe. With over 25 years of extensive industry experience, Younan Properties is dedicated to creating exceptional environments for tenants and delivering consistent returns for investors. The firm’s proven strategy involves acquiring properties with low occupancy, repositioning them effectively, and stabilizing them rapidly. Over the years, Younan Properties has owned and managed some of the most iconic office buildings in major metropolitan areas, demonstrating a consistent track record of successful real estate investment and management.

Attachments

• Houston’s Energy Corridor Leads Submarket Performance
• Future Outlook Brightens.

Alexandra Younan
                    Younan Properties
                    8187039600
                    AYounan@younancompany.com