Houston-based REIT reports 2% growth in Q1 as office market begins to stabilize
(HOUSTON, Texas) May 16, 2024 -- Hartman Properties, a Houston-based REIT owning over 1.1M square feet of Texas office and retail has announced it has leased 87% of its office and retail space, signaling that stability could start to return to the office market in the Lone Star State.
Last week, Hartman Properties announced the completion of a 34,000 sq. ft. office expansion in the prestigious Spectrum Building in San Antonio.
Oracle, a global leader in cloud applications and platform services, solidified its commitment to Texas growth with the signing of a significant lease expansion that would double its business footprint in San Antonio. The move signifies Oracle's strategic expansion plans in the region, aimed at accommodating its growing workforce and enhancing its operational capabilities. The completion of this lease brings the Hartman Properties portfolio to 87% occupied, with a goal of reaching 90% occupied by the end of 2024. This achievement comes amidst challenges in the Texas office market, where the average office occupancy rate hovers around 75%, according to Moody's.
The Oracle lease contributed to Hartman Properties' achievement of an impressive 87% property occupancy rate. Of the total 1,173,689.00 square feet of mostly office and some retail space owned by Hartman Properties, 1,002,988.00 square feet is now leased, marking a nearly 2% increase in occupancy rate in the first quarter of 2024 alone. This milestone underscores the company's commitment to delivering exceptional value to its tenants and supporting the growth and success of businesses in the Texas markets it serves.
In Houston, the the office vacancy rate rose to 26.7% as of the end of the first quarter, according to the latest research from Colliers. This vacancy rate remains on the rise, reflecting a jump of 50 basis points from the fourth quarter of 2023. Furthermore, office leasing activity in Houston dropped to 2.3 million square feet in the first quarter of 2024, down 17.3% from the previous quarter.
Al Hartman, Founder of Hartman Properties, expressed gratitude in the company's achievement. "We are proud to make this announcement, reaffirming our commitment to our investors and tenants," said Hartman. "Just as we have been exceptional stewards of real estate for the last 40 years, we remain dedicated to providing outstanding service and value to our stakeholders," he said.
"We continue to work with prime local, regional and national tenants returning to the office indicating a promising shift towards the re-occupancy of office space for bright markets like San Antonio in 2024. It reaffirms the attractiveness of our properties and the need for high-quality and affordable office space that is close to desirable living areas as more companies plan a permanent return to the office," he said.
The office market has faced significant challenges in the post-pandemic era as companies navigate the hybrid in-office and remote work structure. However, recent statistics indicate a shift towards increased in-office presence, with more companies opting to return to full-time office work in 2024. This trend bodes well for the Texas commercial real estate market and reinforces the importance of properties like the Spectrum Building in accommodating the needs of businesses.
Hartman Properties currently has 13 properties across Texas in its ownership portfolio, including Houston, San Antonio and the Dallas-Fort Worth metro area. This diverse portfolio underscores the company's expertise and presence in key markets across the state.
Hartman Properties currently has 13 properties across Texas in its ownership portfolio, including Houston, San Antonio and the Dallas-Fort Worth metro area. This diverse portfolio underscores the company's expertise and presence in key markets across the state.
"Working with exceptional tenants such as Oracle to achieve an 87% occupancy rate across our entire portfolio is an accomplishment we are exceptionally proud of, Hartman said. "Despite challenging market conditions, this achievement underscores our unwavering commitment to our tenants, investors, and the Texas business community," he said.
For more information about Hartman Properties and its portfolio of premier commercial properties, visit www.hartman-properties.com.
About Hartman Properties: Hartman Properties is a leading commercial real estate management company within Texas, specializing in owning and managing high-quality commercial properties. With a commitment to excellence and customer satisfaction, Hartman Properties offers premier office space in prime locations across Texas. For more information about Hartman Properties, visit www.hartman-properties.com
