In Houston, a Spreading Sea of Empty Offices

After the Enron collapse, Houston office vacancy rates soared to 15.5%. Barron’s┬ácovered the collapse:

“The vacancy rate will go higher as the providers [lawyers, accountants, other professionals] that serviced the energy traders cut back, or as in the case of Andersen go out of business,” says Jay Wall, a vice president with the Houston office of Equis, a commercial real-estate service company. “In addition, a number of merchant energy companies have a large presence in Houston, and some of those will probably go out of business.” He says effective rents — or rents minus promotions and discounts — for larger tenants already have dropped more than 25% since the third quarter of 2001 and are sure to fall still further.