• Playing with Supply and Demand

    by  • January 18, 2012 • CRE, Economics

    I was just going over some of the economic data for Htown this evening Houston Office Supply and Demand - Class A and B– closing out the end of 2011 analysis, checking for December BLS figures – and decided to do a quick analysis of the Houston class A and B office space supply and demand. First I pulled the spreadsheets with the various data, and started in excel, then I quickly realized that I have no software that can model supply and demand, or hypotheticals outside of excel. So I did what I could in excel, then switched over to Photoshop to draw some lines.

     

    The results are interesting, albeit without much more meaning than a glance and what could or theoretically should happen to rents as the current construction is delivered. It should be noted too, that projects like Exxon’s campus down the road will push supply even further to the right and are not totally reflected in what is currently under construction.

     

    Houston Office Absorption vs Employment - Class A and B

    Demand increases from D0 to D1 to D2 would be assumed based on employment and population growth continuing its trend. I’ve outline that trend as well in the graph below, modeling absorption against ‘office type’ employment.

    About

    Patrick Sprouse has over a decade of experience in the commercial real estate sector. Mr. Sprouse has held numerous positions in commercial brokerage, real estate technology and executive operations on regional, multi-market and national scales. Currently Mr. Sprouse is providing management and technology consulting service for a private real estate services company based in Washington, DC with over $1.5 billion in 2015 revenue. Mr. Sprouse has an extensive background in business management, sales engineering, project management, software selection and business analysis as well as organizational change and brand management.

    http://www.patricksprouse.com