Texas

Throughout the first half of 2018, when oil prices appeared to be on a steady upward trajectory, Midland, Texas, saw a number of energy firms up their stakes in the city’s office market. Major names such as Chevron, Anadarko, Apache and Natural Gas Services Group announced build-to-suit office projects in Midland during this time, adding a significant amount of supply to this 6 million-square-foot market. In addition, strong leasing activity by an array of energy firms looking to bolster their operations in the Permian Basin helped the market’s occupancy rate rise to about 92 percent. This growth in occupancy was anchored by a low unemployment rate and accompanied by positive rent growth. Now, however, with oil prices down from their 2018 highs (West Texas intermediate traded at $56.11 per barrel at the time of this writing), there is more uncertainty in the Midland office market. While the office occupancy rate has held steady and rents have even grown slightly during the last year, currently clocking in at about $23 per square foot, Midland could see a significant amount of supply of office space returned to the market over the next six to 12 months. Examples in Action Chevron, which earlier …