A glut of office buildings in the pro-development state is leading to some of the highest vacancy rates in the country, even as population growth spikes.

Writing in The Wall Street Journal, Konrad Putzier describes the mismatch between Texas cities’ booming population growth and the lingering vacancies in the same cities’ office buildings.
In Houston, Dallas, and Austin, roughly 25 percent of office space was vacant in the third quarter of 2023. “That was more than double New York’s vacancy rate of 12% and well above San Francisco’s vacancy rate of 17%,” Putzier writes, despite those cities having some of the nation’s highest return-to-office rates.
What does this mean? For Putzier, “Texas’ high vacancy rate offers more evidence that the U.S. office market’s biggest problem hasn’t been primarily remote work. It is a glut of buildings across the U.S., which has been decades in the making and helps explain why the country has long had much higher vacancy rates than Europe or Asia.”
Putzier explains that Texas is “an extreme case” due to its historically low land costs and lax regulations. “Most of the aging office buildings are in the suburbs around the three big cities. They are increasingly out of favor with a new generation of desk workers who tend to prefer modern buildings in walkable urban neighborhoods.” Now, the state’s biggest cities are seeing vacancy rates close to twice as high as in 2019, with some buildings seeing as much as 34 percent vacancy.
FULL STORY: Texas Cities Are Booming, but Their Offices Are the Most Vacant

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