Texas’ top-tier office markets were off to a slow start this year, wrapping up what looks like one of the worst quarters of the last five years. The dollar volume dropped 63% year-over-year, concluding Q1 with $504 million in disclosed-price transactions, while prices climbed to an average of $199 per square foot. The 5.6 million square feet of inventory that traded during Q1 was the lowest quarterly total in five years. At the same time, developers have been hard at work—nearly 4.8 million square feet of product were delivered in the Austin, Dallas-Fort Worth, Houston, and San Antonio office markets in Q1, and an additional 6.7 million square feet are on track for delivery in Q2.

Texas Office Sales Drop 63% Y-o-Y in Q1

The $504 million in disclosed-price Q1 transactions marks a 63% year-over-year decrease in dollar volume, making it the worst-performing quarter in five years. Out of the 22 sales recorded in Q1, only 10 were disclosed-price transactions. Even though sales amassed in the remaining 12 deals would help paint a more favorable picture, overall office sales activity remained slower than usual—Q1 was the first quarter in five years when fewer than 30 major office deals closed across the top four Texas markets.

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