I was just going over some of the economic data for Htown this evening – 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.
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.