Houston’s office market has shown signs of recovery in the third quarter, with a notable boost from Frazer’s decision to relocate its headquarters to Sugar Land. The ambulance manufacturer signed a full-building lease for 1410 Gillingham Lane, occupying 150,000 square feet. According to Colliers, this move represents the largest single absorption in the local office market during the quarter.
Frazer announced plans last year to invest $4 million into renovating and expanding the property, which was originally built in 2001. The building changed ownership last summer when San Diego-based CIRE Equity, led by Trevor Smith, acquired it from Thermo Fisher Scientific.
The Sugar Land area contributed 5.9 percent of all leasing activity in Houston during the third quarter and ranked seventh among submarkets for positive absorption. In comparison, West Loop and Energy Corridor led with more than 200,000 square feet each of positive absorption.
Colliers reports that since the pandemic began, Houston’s office sector has been gradually recovering. The citywide vacancy rate fell from 27.9 percent one year ago to 27.4 percent this year. In contrast to last year’s third quarter—which saw a negative net absorption of 23,700 square feet—the most recent period recorded a positive net absorption of 555,000 square feet between July and September. This marks two consecutive quarters where more space was leased than vacated, representing the first sustained period of positive net absorption since 2019.
A preference for higher-quality office space continues to shape leasing trends across Houston. Buildings constructed since 2015 have an average vacancy rate of just 11.9 percent, reflecting tenants’ interest in newer properties with enhanced amenities.
Recent examples include Skanska’s delivery of Norton Rose Fulbright Tower at 1550 Lamar Street last year—a new 386,000-square-foot tower that is now 62 percent leased after Third Coast Infrastructure became its latest tenant.
