Houston’s office market showed signs of recovery in the third quarter, driven by significant leases such as Frazer’s move to Sugar Land. The ambulance manufacturer signed a full-building lease at 1410 Gillingham Lane, occupying 150,000 square feet. This was the largest single absorption in the Houston office market during the period, according to Colliers.
Frazer had previously announced its relocation plans and an investment of $4 million to update and expand the property, which was built in 2001. The building changed ownership last summer when CIRE Equity, led by Trevor Smith and based in San Diego, purchased it from Thermo Fisher Scientific.
Sugar Land represented 5.9 percent of all leasing activity in the third quarter and ranked seventh among submarkets for positive net absorption. Other areas like West Loop and Energy Corridor led with more than 200,000 square feet each in positive absorption.
Colliers reported that Houston’s overall office vacancy rate decreased from 27.9 percent a year ago to 27.4 percent this year. In contrast to last year’s third quarter—which saw negative absorption of 23,700 square feet—the latest figures show that 555,000 square feet were absorbed between July and September. This marks the second consecutive quarter where more space was leased than vacated—an achievement not seen since 2019.
A trend toward newer buildings is apparent as well; offices constructed since 2015 have an average vacancy rate of just under 12 percent, indicating strong demand for modern spaces with upgraded amenities.
Recent projects highlight this shift: Skanska completed Norton Rose Fulbright Tower at 1550 Lamar Street last year—a new trophy office tower spanning over 386,000 square feet across 28 stories. The building is now about two-thirds leased after Third Coast Infrastructure became its latest tenant.
