Houston is one of the largest commercial real estate markets in the US with approximately 200 million square feet of commercial space. The market is heavily influenced by the oil, gas, and energy sectors, creating boom-and-bust cycles that affect vacancy rates and concession packages. Texas is a landlord-friendly state with no state income tax, attracting significant corporate relocations and speculative industrial development.
Commercial Space
200M sq ft
Avg Office Rent
$25–$45/sq ft
Vacancy Rate
26%
Avg Lease Term
5–10 years
Market figures are directional planning estimates and may vary by submarket, property class, building condition, and lease structure.
Houston's energy corridor and Galleria submarkets favor Modified Gross and FSG for office. Suburban office parks and industrial properties across the metro are predominantly NNN. Retail centers along major corridors use NNN. High office vacancy since the energy sector contraction has driven generous TI packages and extended free-rent periods-both critical to extract accurately for portfolio analysis.
Texas Landlord–Tenant Guide
State-specific commercial lease laws, notice periods, and tenant rights for Texas→
Texas is generally landlord-friendly with few statutory tenant protections for commercial leases. This makes it especially important to negotiate and carefully abstract provisions like audit rights, CAM caps, and termination options-protections that aren't implied by law.
A NNN lease quotes base rent, but your actual monthly payment is typically 25–40% higher. Learn to calculate total occupancy cost - base rent + CAM + taxes + insurance - with worked examples.
A complete reference for commercial lease financial terms. Covers base rent, escalations, NNN vs gross, TI allowances, and percentage rent with examples.
The five main types of commercial leases - NNN, gross, modified gross, percentage, and ground - have very different cost structures and risk profiles. Here's how each works.
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