Downtown Quarterly Market Report Q1 2025

D OWNTOWN

Quarterly Market Report

Q1 25 downtownhouston.org

Q1 2025

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Downtown Houston Rodeo Parade

D OWNTOWN

Quarterly Market Report Downtown Houston Rodeo Parade

Contents 4

5

6

8

10

CEO Letter Quarter Highlights Development Updates Top Stories from the Quarter

Q1 2025

18

26

30

32

Doing Business Downtown Living Downtown Looking Ahead Appendix

The Downtown Experience

Table of Contents

3

Letter from our CEO The first quarter of 2025 demonstrated remarkable

the five years prior, another 2,377 units were added.

highs and lows. Well, one low, really: On January

While this influx of supply introduced fluctuations in

21, winter storm “Enzo” delivered a rare six inches

multifamily rents and vacancy rates, the market has

of snow across our Deep South. Makeshift sleds

consistently demonstrated its ability to absorb the

ventured down Buffalo Bayou embankments while

new supply and return to stability as projects leased

a manifested militia of snowmen stood guard on

up. In total, 4,592 units were delivered over the past

street corners around the city. On the high side,

decade while the market absorbed 4,624 units, with

the office sector showed continued growth and

demand slightly outpacing supply.

resilience, residential units continued to fill, and the visitor economy received a boost from new facility announcements and the opening of baseball season.

Finally, the attractiveness of Downtown as a place for visitation received a huge adrenaline boost in the first quarter as Houston First Corp. revealed their

On the office side, return-to-office trends set new

renderings for the multi-billion-dollar expansion and

records both nationally and locally, as March 2025

overhaul of the George R. Brown Convention Center.

set a post-pandemic high for monthly employee

The newly badged Daikin Park hosted Opening Day

recovery at 74.3% compared to March 2019. Houston

on March 27th, and the Rockets solidified that playoff

was also ranked by CoStar as the #1 city for in-office

basketball would soon be returning to Downtown.

rates relative to a set of 10 large cities. Hines’ newest

The hotel supply welcomes 221 new hotel rooms

office tower, Texas Tower, reached 99% leased, just

via the deliveries of Home2 Suites & Tru by Hilton,

three years after opening. Plus, the project received

while another 471 hotel rooms still reside in the

a $450 million refinancing loan, highlighting investor

development pipeline which will bring the total

confidence in trophy assets. Meanwhile, North

Downtown hotel inventory to over 9,400 rooms.

American wind industry leader Vestas opened their first office in Downtown to add to the growing cluster of energy transition companies in the city center.

The

Downtown

With the first quarter of 2025 now in the books, our team stands poised to support the enjoyment of Downtown’s many stakeholders. Whether for work, leisure, entertainment or fun, springtime in

neighborhood

experienced

Downtown Houston is a special time of year.

steady growth as well. The final multifamily property currently in the pipeline is Ely at the Ballpark, a 229-unit mid-rise, which is slated for delivery in the coming months. Looking back over the past five years, 2,215 new residential units have been delivered Downtown, marking a 37% increase in inventory—or a 7.4% level of annualized growth. In

4

CEO Letter

Kristopher Larson, AICP, LPM President & CEO

Quarterly Market Report

Q1 2025 Highlights

Total visits to Downtown Houston, Q1 2025

Unique visitors to Downtown Houston, Q1 2025

Average daily visits during Rodeo season vs. Q1 2025

Office activity recovery rate, March 2025 (record high)

Funding committed to Thrive Storefront Grant Program, as of Q1 2025

Hotel rooms delivered in Q1 2025 (incl. Home2 Suites & Tru by Hilton)

Q1 2025

8.7M 3.3M 114K 18 74.3% 10 $226K 221 2.5

%

YoY

%

%

Quarter Highlights

5

Development Updates Estimated Delivery

Q2 2025

Status

Under Construction

Rentable Area

Developer

Sovereign Properties

Number of Units

10 Crawford Street

Number of Stories

Address

Hospitality

Estimated Delivery

Q1 2026

193,000 SF

Status

Under Construction

Rentable Area

-

229

Developer

J.W. Marriott

Number of Rooms

56

806 Main Street

Number of Stories

22

Hospitality

Estimated Delivery

500,000 SF

6

Address

George R. Brown Convention Center Expansion

Hospitality

Estimated Delivery

Status

Proposed

Rentable Area

-

Status

Proposed

Rentable Area

Developer

SLTX Capital

Number of Rooms

140

Developer

Houston First Corporation

Number of Rooms

-

405 Main Street

Number of Stories

11

Address

1420 Chenevert Street

Number of Stories

-

Mixed-Use

Estimated Delivery

-

Proposed

Rentable Area

60,000 SF

Crane Capital Group

Number of Rooms

300

-

Number of Stories

17

Retail

Estimated Delivery

Spring 2025

Rentable Area

-

Type

Address

2027

6

Holiday Inn Express and Staybridge Suites Houston TX 3

Type

Houston Astros Entertainment District

Hospitality

Estimated Delivery

Late 2025

Status

Under Construction

Rentable Area

-

Status

Developer

Neway Hospitality

Number of Units

275

Developer

1319 Texas Avenue

Number of Stories

17

Address

Type

Address

7

Ascend Collection Houston 4

Type

Market Square Park Kiosk: Petite Lucie

Hospitality

Estimated Delivery

2025

Proposed

Rentable Area

50,250 SF

Status

Proposed

Developer

Choice Hotels

Number of Units

67

Developer

Downtown Redevelopment Authority

Address

402 Main Street

Number of Stories

10

Address

301 Milam Street

Type Status

•

DE

L IV

ER

D E L I V E RED

•

DE

E D D

•

R E C E N T LY

Type

LI

ER

D

8

V

E

E

LI

VE RED

9

Warehouse District Phase I

11

Elev8

13

MOXY

10

Warehouse District Phase II

12

Home2 Suites & Tru by Hilton

14

Norton Rose Fulbright Tower

6

Office

Type

5

Scanlan Building 2

Hospitality

J.W. Marriott Expansion

Residential

Type

Mixed-Use

Retail

Ely at The Ballpark 1

Residential

Development Updates

Quarterly Market Report

10 9

WHIT

EO

AK

BA

YO

10 U

F BUF

ALO

B AY

OU

1 69 59

8 4 13

2 3

45

7

5

6 14

12

69 59

11

BRAZOS

45

Top Stories of Q1 2025 1

2

Texas Tower Climbs to 99% Leased Beating the odds after delivering during the depth of the pandemic, Hines’s Texas Tower notched a major milestone by inking a 52,000-SF lease for two full floors with law firm Skadden, Arps, Slate, Meagher & Flom. Mark O’Donnell with Savills represented the tenant, and Michael Anderson of Cushman & Wakefield represented the landlords. Also in Q1, the 47-story tower at 845 Texas Avenue became the first multitenant office tower outside New York City to be financed through the CMBS single-asset, single-borrower market in two years. Dubbed “a poster child for the flight-to-quality trend” by one CRE publication, the office tower secured $450 million in refinancing.

8

Top Stories

3

Hotel Conversion Coming to Scanlan Building The 116-year-old Scanlan Building will return in 2027 as a Canopy by Hilton, a 140-room boutique hotel in a conversion led by SLTX Capital. Once known as the Texas “White House,” the historic landmark will be renovated at a pivotal moment, unfolding alongside the transformational Main Street Promenade project.

The announcement follows a strong start

to

hospitality

2025

for

sector,

Downtown’s with

Home2

Suites & Tru by Hilton delivering 221 rooms in South Downtown in Q1. Nearly 400 additional rooms are expected next year through three more developments, further expanding Downtown’s hotel pipeline.

George R. Brown Convention Center Expansion Unveiled A $2 billion transformation of the George R. Brown Convention Center will reshape Downtown’s east edge

with

a

more

pedestrian-forward

connected, experience.

Phase one brings a 700,000-SF expansion to the south end, two new exhibit halls, Texas’ largest ballroom, new public spaces, and ground-level retail and dining. The project will ultimately link Downtown with East Downtown, re-stitching communities while strengthening Downtown Houston’s position as a global destination for conventions and tourism.

Quarterly Market Report

4

5

6

Energy Leaders Convene for CERAWeek In March, the George R. Brown hosted CERAWeek, reinforcing Houston’s role as the global nexus where energy leaders converge to navigate the sector’s evolving landscape and chart its future direction. High-profile speakers—including U.S. Energy Secretary Chris Wright and CEOs from giants like Saudi Aramco, Chevron and Shell—addressed the evolving policy environment, particularly the U.S. administration’s push for increased domestic oil and gas production. Notably, liquefied natural gas (LNG) emerged as a bright spot, with the U.S. positioned as the world’s leading exporter and significant expansion projects on the horizon, further underscoring Houston’s enduring significance as the central arena for forecasting and shaping the global energy sector.

Q1 2025

Open House Packs Theater District More than 18,600 people passed through the doors of iconic venues in Downtown’s Theater District for the return of Open House—the first since 2019. Families, arts lovers and curious newcomers dropped in on a beautiful Monday afternoon to kick off Spring Break with a deep dive into Houston’s world-class performing arts scene.

They explored beloved stages, met performers and enjoyed free shows, behind-the-scenes tours and handson activities. Highlights included a

Downtown Baseball at 25 Years & Counting The Astros launched into their 26th year in Downtown with more than 42,000 fans packing the newly dubbed Daikin Park on its Opening Day debut. After drawing 21,000 for FanFest in January, Opening Weekend’s multiple sellouts proved Houston is fired up for another run at the pennant. Beyond the ballpark, a wave of orange and blue rolled across Downtown as fans flocked to bars, restaurants and other venues for game-day specials and watch parties throughout the weekend.

Broadway dance workshop with a Hamilton cast member, the chance to make a stage debut at the Hobby Center, and outdoor performances at Lynn Wyatt Square.

Top Stories

9

The Downtown Experience Signature spring events and strong daily foot traffic brought the energy to Downtown Houston in Q1. Thousands turned out for major events like the Rodeo and Lunar New Year Festival, while more than 200 new hotel rooms—and more in progress—strengthened Downtown’s appeal as a place to stay, play and explore.

Lunar New Year Market Market Square Park

10

The Downtown Experience

Quarterly Market Report

Visits & Visitors

Resident Employee Visitor

6%

41%

Weekday

7%

Movies Under The Stars Trebly Park

11%

What Stands Out • Downtown Houston averaged over 114,000 daily visits during the Houston Livestock Show and Rodeo, 18% higher than the Q1 2025 daily average.

• 221 new hotel rooms delivered in Q1, with 471 more still in the pipeline. These projects will push Downtown’s total projected inventory past 9,400 rooms, with the conversion of the Scanlan Building planned to deliver in the summer of 2027.

• Lunar New Year Festival brought 7,500 attendees and $340,000 in direct economic impact to the Historic District—highlighting a programming strategy for microhood events.

Q1 2025

53%

82%

Weekend

8.7M

Visits in Q1 2025

3.3M

Unique Visitors in Q1 2025

2h 23m

Median Visitor’s Length of Stay SOURCE: PLACER.AI

The Downtown Experience

11

Downtown Visits Hits March High Final Four Watch Party Avenida Houston

Visitor traffic to Downtown surged in March, driven by warmer weather and major draws like the Houston Livestock Show & Rodeo, Spring Break and CERAWeek. The month closed with the fourth-highest visit total since the pandemic, averaging more than 114,000 visits per day. Rodeo season played a key role, with many attendees using METRORail for a quick trip to the festivities at NRG Park. On average, daily visits during Rodeo

Downtown Houston Rodeo Parade

season were 18% higher than a typical Q1 day.

Q1 2025 Hospitality Data SOURCE: HOUSTON FIRST

YoY

ADR

YoY

RevPAR

YoY

January

58.0%

+7.2%

$217

-11.7%

$126

-5.4%

February

66.9%

+5.1%

$253

+7.6%

$169

+13.1%

March

75.6%

+10.6%

$261

+9.5%

$197

+21.0%

Q1 2025

66.9%

+7.8%

$245

+2.5%

$164

+10.5%

• January saw slower growth partly due to Houston hosting the National

Demand

10.3% Revenue

13.1% 12

Occupancy

Football Championship last year • March saw healthy growth due to business as well as leisure travel • Business travel was especially strong in March due to CERAWeek, helping

The Downtown Experience

to support 93% in occupancy at the peak of the conference

Quarterly Market Report

Buffalo Bayou Partnership Regatta Allen’s Landing

Regatta Returns to Allen’s Landing Houston’s historic Allen’s Landing in Downtown was the focal point on March 22 as it hosted the finish line of the annual Buffalo Bayou Partnership Regatta. Participants enjoyed a

by the Buffalo Bayou Partnership and presented

paddle along Buffalo Bayou in kayaks and canoes,

by Gillman Subaru, serves as a powerful reminder

beginning their journey west of Memorial Park and

of the city’s connection to its waterways and

concluding at Allen’s Landing, the site where the

supports ongoing efforts to maintain and improve

city was founded. This annual event, organized

the bayou.

Q1 2025

The Downtown Experience

13

Downtown Visits & Impacts PERCENTAGE CHANGE FROM BASELINE AVERAGE

Population spikes driven by major events, concerts and gamedays offer valuable insights

February 14 63%

into activity patterns and opportunities for

• Valentine’s Day

growth across the quarter.

• Cactus Jack HBCU Classic at Daikin Park • Gabriel Iglesias at Toyota Center

February 1 45% • Houston Rockets vs. Brooklyn Nets • Lunar New Year Festival • Simone Biles International Invitational at George R. Brown Convention Center

January 18-19 30% • We Are Houston 5K • Houston Marathon Health & Fitness Expo at George R. Brown Convention Center

100%

• Chevron Houston Marathon

80% 60% 40% 20%

AVERAGE DAILY VISITATION (100K)

0% -20% -40% January 20 -87%

-60%

• Martin Luther King Jr. Day • Snow Days

-80% -100%

JAN 14

The Downtown Experience

FEB Quarterly Market Report

SOURCE: PLACER.AI

March 29 62% • Houston Astros Opening Weekend vs. New York Mets

March 8 73%

• Sneaker Con at George R. Brown Convention Center

• Houston Rockets vs. New Orleans Pelicans • Cross Court Classic at George R. Brown Convention Center

March 15 67% • Houston Rockets vs.

Chicago Bulls

March 1 86%

• Oddities & Curiosities Expo at George R. Brown Convention Center

• Astros Foundation College Classic • Houston Rockets vs.

Sacramento Kings • Houston Rodeo Run & Parade

200k 180k 160k 140k 120k 100k 80k 60k 40k 20k 0

MAR Q1 2025

The Downtown Experience

15

Downtown Sets the Stage for Rodeo Season Rodeo season kicked off in Downtown, where tens of thousands gathered for the annual Rodeo Run and Parade—complete with cowboys, marching bands and trail riders clopping through the heart of the city.

Even as the main events moved south to NRG Park, Downtown remained a hub of Rodeo revelry.

Visitors booked hotel stays and used the METRORail to get into the action—navigating with help from 48 wayfinding decals placed by Downtown Houston+ to steer them to the southbound

Downtown Houston+ kept the energy going with pop-up performances by future Rodeo stars at Flying Saucer’s

Main

Street

patio,

providing a nice soundtrack for METRORail riders and after-work crowds alike.

Downtown’s Clean & Safe Ambassadors got in the spirit too, trading uniforms for

rail. Those markers also connected visitors to a

Western wear, assisting visitors with directions

custom Rodeo Guide mobile experience, offering

and safety info—and handing out Rodeo-themed

directions, dining picks, entertainment hotspots—

stickers for pint-sized cowboys and cowgirls

and even a way to book METRO tickets.

passing through.

Downtown Houston Rodeo Parade

16

The Downtown Experience

Quarterly Market Report

Lunar New Year Brings Big Turnout & Local Impact DEEP DIVE

In February, thousands came together in Market

Combining high-quality programming with support

Square Park to ring in the Year of the Snake at one

for the local economy is central to the Public Realm

of Downtown’s liveliest annual traditions. With lion

Action Plan’s microhood activation strategy: planned

and dragon dances, and a DJ supplying the vibe for

experiences that enliven nearby streets and drive

a local market, the Lunar New Year Festival brought

real returns for area businesses.

nonstop energy—and economic activity.

More than 7,500 attendees joined the Downtown celebration, generating over $340,000 in direct

What you should know:

economic impact, with nearly 60% visiting a

Attendees

7,500

bar or restaurant during their trip. Surrounding establishments saw a surge in foot traffic, including Cooking Girl on Travis Street, which reported a 30%

Average Spending by Attendee

revenue jump on the day.

$78 $

Direct Economic Impact

$340k SOURCE: PLACER.AI; SURVEYMONKEY

Lunar New Year Festival Market Square Park

Q1 2025

The Downtown Experience

17

Doing Business Downtown Downtown Houston led the nation in return-to-office momentum this quarter, as toptier towers welcomed renewed leases, major tenants and national recognition. New additions—from Vestas to UH-D’s campus expansion—signal confidence in Downtown as a vital hub for energy, education and business.

Downtown Public Safety Guides

18

Doing Business Downtown

Quarterly Market Report

What Stands Out

• March 2025 Sets a New Monthly Employee Recovery Record: Downtown Houston Office Recovery averaged 74.3% of pre-pandemic levels.

Q1 2025 as a whole just narrowly missed the record, averaging 70.3% of pre-pandemic levels.

• Market Asking Rents Continue to Increase: Market asking rents stabilized in 2024, and look to be on the rise for 2025 with no projects under construction. Q1 2025 saw increases of 0.5% and 1.5% quarter-over-quarter and year-over-year, respectively.

• Demand Continues for Trophy Buildings: Texas Tower reached a milestone of 99% occupancy in Q1, just three years after opening. Additionally, the building secured a $450M refinancing loan, highlighting investor confidence in Class A assets.

Q1 2025 Leasing Activity S O U R C E : C O S TA R Building Name

Address

SF Leased

Sign Date

Move Date

Lease Type

Tenant

Transaction Type

Texas Tower

845 Texas

52,482

Feb-25

Apr-26

Direct

Skadden

Move-In

Two Allen Center

1200 Smith

27,287

Feb-25

-

Direct

Riverbend Energy Group

Renewal

JPMC Tower

600 Travis

25,769

Feb-25

Oct-25

Direct

KKR & Co

Move-In

JPMC Tower

600 Travis

22,561

Jan-25

May-25

Sublet

Simpson Thacher

Move-In

811 Main

811 Main

17,437

Feb-25

Aug-25

Direct

Houlihan Lokey

Move-In

609 Main

609 Main

14,979

Jan-25

Mar-25

Sublet

Vestas Wind Systems A/S

Move-In

Great Jones

708 Main

10,446

Jan-25

Apr-25

Direct

Crispin

Move-In

Texas Tower

845 Texas

7,713

Feb-25

Mar-25

Direct

-

Move-In

Pennzoil Place South

711 Louisiana

7,214

Mar-25

Jun-25

Direct

-

Move-In

1001 McKinney

1001 McKinney

7,132

Feb-25

Feb-25

Direct

-

Move-In

Pennzoil Place South

711 Louisiana

6,316

Jan-25

Mar-25

Direct

-

Move-In

1001 Fannin

1001 Fannin

6,060

Feb-25

Mar-25

Direct

-

Move-In

1001 McKinney

1001 McKinney

5,777

Jan-25

Jan-25

Direct

Manhattan Resources

Move-In

Mafrige Building

411 Fannin

5,300

Mar-25

May-25

Direct

Lions Gate

Move-In

TC Energy Center

700 Louisiana

3,923

Feb-25

Mar-25

Direct

-

Move-In

Lyric Tower

440 Louisiana

3,841

Mar-25

Mar-25

Sublet

-

Move-In

609 Main

609 Main

3,475

Jan-25

Feb-25

Direct

-

Move-In

1001 Fannin

1001 Fannin

2,259

Feb-25

Apr-25

Direct

-

Move-In

Two Allen Center

1200 Smith

2,215

Mar-25

Apr-25

Sublet

-

Move-In

Two Allen Center

1200 Smith

2,215

Mar-25

Apr-25

Sublet

-

Move-In

1001 McKinney

1001 McKinney

1,630

Feb-25

Mar-25

Direct

-

Move-In

1001 McKinney

1001 McKinney

1,520

Feb-25

Feb-25

Direct

-

Move-In

POST HTX

401 Franklin

1,154

Feb-25

Mar-25

Direct

-

Move-In

St Joseph Medical Center

1315 St Joseph

1,546

Jan-25

Jan-25

Direct

-

Move-In

1001 McKinney

1001 McKinney

1,376

Jan-25

Feb-25

Direct

-

Move-In

St Joseph Medical Center

1315 St Joseph

953

Jan-25

Jan-25

Direct

-

Move-In

One Allen Center

500 Dallas

829

Jan-25

Feb-25

Direct

-

Move-In

Activity

Square Feet

Leases

Total

243,409

27

Direct

197,598

22

Sublet

45,811

5

Move-In

216,122

26

Renewal

27,287

1

Q1 2025 Office Stats S O U R C E : C O S TA R

Q1 2025

Q1 2025

QoQ

YoY

Downtown Market Asking Rent PSF (Annual)

$36.63

0.5%

1.5%

Downtown Class A Market Asking Rent PSF (Annual)

$40.20

0.7%

1.5%

Overall Vacancy

26.4%

0.8%

1.3%

Overall Availability

27.4%

-0.8%

-2.8%

Doing Business Downtown

19

Norton Rose Fulbright Tower Honored as ULI Development of Distinction Overlooking one of Houston’s most iconic parks,

Discovery Green up into the building. With its

Skanska’s 28-story tower at 1550 Lamar boldly

unique side-core design, expansive floor plate

launched a three-block master plan and earned

and LEED Platinum mechanical system, the

a coveted Urban Land Institute (ULI) award for

Norton Rose Fulbright Tower raised the stan-

large-scale development. The Bjarke Ingels Group

dard for Houston architecture and office life. On

design added amenities made for Texas weath-

the ground floor, Tenfold Coffee Company brings

er including multiple terraces to pull views of

buzzy activity to the street fronting the park.

Norton Rose Fulbright Tower 1550 Lamar Street

20

Doing Business Downtown

Quarterly Market Report

UHD @ 1801 1801 Main Street

University of HoustonDowntown Cuts Ribbon at 1801 Main Street With Mardi Gras to set the tone, DRA/TIRZ #3

Career Services. It will also house the Center for

Chair, Curtis Flowers, and Vice Chair, Dr. Michele

Crime, Urban Research and Education to tackle

J. Sabino, joined fellow board members and

complex urban challenges through research, ed-

University of Houston-Downtown (UHD) President

ucation and collaboration. Connected to UHD’s

Dr. Loren Blanchard toasting UHD’s expansion at

main campus via METRORail on Main Street, this

1801 Main Street. The new UHD space in the Amegy

southward expansion fortifies the university’s

Bank Building adds 17,000 SF of sleek office space

leadership role in Downtown.

for Continuing Education, Alumni Relations, and

Q1 2025

Doing Business Downtown

21

Global Wind Leader Vestas Lands on Main Street

Vestas Ribbon Cutting 609 Main Street

Global wind turbine manufacturer Vestas has chosen Houston’s Main Street, specifically a Hines-developed tower at 609 Main, as the location for its new U.S. corporate office. This move by Vestas, which already employs over 500 people in Texas and has installed over 3,000 turbines in the state, highlights Houston’s growing role in leading the energy transition. As the top state for wind energy capacity, Texas provides an ideal base for Vestas to expand its operations and be closer to its projects, customers and suppliers.

The establishment of this office in Downtown Houston solidifies the area as a central hub for innovative energy companies shaping the future of the industry.

22

Doing Business Downtown

Quarterly Market Report

Houston Tops U.S. in Return-to-Office and Downtown Sets New Record DEEP DIVE

Houston led the nation in employee return-to-office throughout Q1 2025, outperforming nine major U.S. metros including New York, San Francisco and Los Angeles.

Downtown Houston followed suit, setting a new quarterly record with 89% of employees back in some capacity, and total office activity hitting a new high in March at 74% of pre-pandemic levels.

This activity translated directly to the street, with March averaging more than 114,000 daily visits, driven in part by major events like the Houston Livestock Show & Rodeo and CERAWeek.

As anchor tenants renew leases and new firms plant roots in top-tier towers, Downtown’s momentum is set to grow, with planned upgrades to key corridors, public spaces and parks enhancing its appeal as a connected, livable district.

Norton Rose Fulbright Tower 1550 Lamar Street

What you should know: • Houston ranked No. 1 among 10 major U.S. metros in return-to-office for 14 of 16 weeks in Q1.

• Only a rare snowstorm and a busy Spring Break/Rodeo week edged it out of the top spot during the first 16 weeks of 2025.

• Downtown Houston hit record activity levels: 89% employee return in the quarter, and 114,000+ average daily visits in March.

• Planned improvements to key streets, sidewalks and public spaces will make Downtown more comfortable and appealing for employees—helping companies create a workplace experience worth the commute.

Industrious 1301 McKinney Street

Q1 2025

Doing Business Downtown

23

Deeper Dive

La Calle Storefront Rendering 909 Franklin Street • Rendering provided by La Calle

Grant Programs Benefit Businesses in Downtown Downtown Houston+ is strategically investing in established and emerging retail corridors through a suite of targeted grant programs.

Launched in Q4 2024, the Houston Downtown Management District-funded Storefront Grant Program has demonstrated early success,

24

Doing Business Downtown • Deeper Dive

with $226,000 allocated to eight projects as of the end of Q1 2025. Approximately half of these funds are supporting enhancements along Main Street, with the remainder driving improvements to storefronts within one block of the future Main Street Promenade.

This program, alongside the Facade Grant Program (totaling $1 million) and Dealmaking Inducements ($500,000), aims to stimulate economic activity and enhance the Downtown environment in preparation for the 2026 FIFA Men’s World Cup. The early progress in the Storefront Grant Program, with its focus on improving the pedestrian experience and street-level aesthetics, signals a promising trend towards a more vibrant and economically robust Downtown.

Quarterly Market Report

2024 Office Story The Downtown Houston Office Story is a comprehensive, survey-based report covering 39 office buildings with a combined 32

million square feet of rentable space. Now in its 41st year, the report is designed to help building owners and landlords assess how their properties compare to peers and the broader market. It serves as a. benchmark to track supply and demand trends in Downtown, offering insights into available space, tenant industries, operating expenses, and more.

Fnd this report published on the DTH+ website in early May: dthplus.org/research

Q1 2025

Doing Business Downtown • Deeper Dive

25

Living Downtown In January, a rare snow day brought residents out to play and soak in the moment on Downtown’s blanketed streets and sidewalks. With more units being leased and key upgrades underway at Trebly and Market Square Parks, signs point to steady demand for Downtown living—and attention to the details that make it feel like home.

Downtown Snow Day January 21, 2025

26

Living Downtown

Quarterly Market Report

Z on 23 1121 Walker Steet

What Stands Out

Residential Statistics

• Vacancy Continues to Move Toward Market Average: Downtown posted a vacancy rate of 11.9% in Q1 2025, down over 4.5% from last year. This is within 1% vacancy of multifamily units inside the 610 Loop, and is 2.5% lower than vacancy within a two-mile radius.

44

Total Residential Properties

8,222

Total Residential Units

• Rent Rates Tick Up: Asking rent was $2,344 at the end of Q1 2025, up 0.5% quarter-over-quarter and up 0.7% year-over-year. With the market receiving an influx of new supply over the last few years, rents have been relatively stagnant.

• Multifamily Development Pipeline Set to Clear: With only one more multifamily project under construction set to deliver in Q2, we expect to see these trends of marginally increasing rent and decreasing vacancy in the near future. However, there is still active development in the area.

1

Total Residential Properties Under Construction

229

Total Residential Units Under Construction S O U R C E : C O S TA R

Q1 2025

Living Downtown

27

A Certified Snow Day in Downtown A

once-in-a-generation

snowstorm

turned

Downtown into a winter playground in January, with up to six inches of powdery snow blanketing the city. Residents—and their four-legged friends— gathered in Downtown parks to make the most of the rare Snow Day, building snowmen, tossing snowballs and soaking up the magic. Throughout it all, Downtown Houston+ Ambassadors remained a steady presence—strolling through neighborhoods, assisting visitors and helping ensure the rare winter moment stayed safe and fun for everyone.

Q1 2025 Residential Statistics S O U R C E : C O S TA R

28

Living Downtown

Downtown

Greater Downtown

The Loop

Existing Units

8,222

34,729

139,087

YoY

2.3%

5.4%

3.7%

Under Construction Units

229

1,683

5,006

Monthly Avg Asking Rent

$2,344

$1,885

$1,786

Asking Rent / SF

$2.41

$2.09

$1.99

QoQ

0.5%

0.2%

0.4%

YoY

0.7%

-0.5%

0.4%

Vacancy Rate

11.9%

14.4%

11.1%

QoQ

-0.3%

-0.5%

0.2%

YoY

-4.6%

0.6%

1.4%

Market Cap Rate

6.49%

6.74%

6.74%

QoQ

0.04%

0.04%

0.04%

YoY

0.21%

0.22%

0.22%

Quarterly Market Report

Development Pipeline Set to Clear DEEP DIVE

Over the past five years, 2,215 new residential units have been delivered Downtown, marking a 37% increase in inventory—or roughly 7.4% growth annually. From 2015 to 2019, another 2,377 units were added. While this wave of development introduced some fluctuations in multifamily rents and vacancy rates, the market has consistently demonstrated its ability to absorb the new supply and return to stability as projects leased up. Over the past 10 years, 4,592 units have been delivered in total, and the market absorbed 4,624 units— outpacing supply slightly.

Ely at The Ballpark 10 Crawford Street

Ely at The Ballpark

6,277

6,277

6,077

6,077

8,451

8,222

7,734

4,241

3,423

3,023

2,349

2,349

5,687

Downtown Residential Units

7,079

The final property currently in the pipeline is Ely at the Ballpark, a 229-unit mid-rise slated for delivery in Q2 2025. As these most recent additions continue to lease, the market is expected to remain on a stable path.

2012

2025 SOURCE: DOWNTOWN HOUSTON+

Brava 414 Milam Steet

Q1 2025

Living Downtown

29

Looking Ahead

METRO Opens Direct IAH Route to Downtown

Preprations for World Cup Underway

Getting to and from Downtown just

With just a year to go until the

got easier. Launching in mid-April,

world’s

METRO’s new 500 IAH Downtown

preparations are well underway to

Direct offers a fast, affordable

welcome fans from around the globe

connection

R.

for seven tournament matches.

Brown Convention Center and Bush

Downtown Houston+ is focused

Intercontinental

just

on making it easy—and enjoyable—

$4.50 one-way. Running every 30

to get around. This year, DTH+ is

minutes from 5:30am to 8pm daily,

rolling out public realm upgrades

the

convention

and investments to high-traffic

attendees, business travelers and

corridors to improve the pedestrian

visitors with a stress-free alter-

experience, launching construction

native to rideshares and parking.

of the Main Street Promenade,

As the most connected district in

resurfacing 80 blocks of Downtown

Houston—where all METRO lines

streets, and installing new public

converge—Downtown

offers

art for a more immersive, walkable

even broader access to the region,

connection between Downtown and

thanks to this key addition from the

East Downtown.

route

between

George

Airport

provides

at

now

biggest

sporting

event,

Petite Lucie Set to Break Ground at Market Square Park Chef Omar Pereney’s “love letter to Downtown Houston” is one step closer to reality. Construction will soon begin on the kiosk renovation at Market Square Park, transforming the existing structure and adding a new open-air bar. Set to open in late summer 2025, Petite Lucie will offer an all-day French café and bistro experience in the heart of the Historic District, with sit-down dining, espresso and drink service, and a robust catering program.

The project marks a fresh chapter for the park and adds to a growing wave of new dining experiences across Downtown.

METRONow initiative.

30

Looking Ahead

Quarterly Market Report

Public Realm Action Plan Projects Coming in 2025 After

last

driven

engagement,

year’s

Grants Open to Support Business Renovations

DTH+ Begins Grocery Study

community-

Applications are now open for a

the

series of targeted grants from

Public

Realm Action Plan is moving into

Downtown

Houston+

designed

implementation, focusing on con-

to support storefront upgrades,

nection, comfort and street-level

enhance public spaces and drive

energy. In 2025, Downtown Hous-

retail growth. Storefront Grants

ton+ will launch major corridor

(funded by HDMD) help businesses

improvements along Texas Avenue,

improve lighting, signage and other

McKinney and Preston Streets, while

street-facing

also advancing construction for the

Grants (funded by DRA) support

new Main Street Promenade. A re-

structural restoration within TIRZ

freshed programming strategy is

boundaries.

already shaping frequent activation

year: new grants for sidewalk-

in parks, and stakeholder groups will

facing improvements like outdoor

convene to explore upgrades in park

seating and patio buildouts that

management and reimagine the role

create a more inviting pedestrian

of Downtown’s tunnels and ground-

experience. Learn how to apply at

floor spaces. Beginning this year

downtownhouston.org

features.

Coming

Façade

later

this

Downtown Houston+ is conducting a data-driven Grocery Feasibility Study to better understand how different

grocery

models—from

compact

bodegas

to

full-scale

markets—can serve each unique Downtown submarket. The goal is to connect local demand with viable operator partnerships and create a clearer path for grocery investment.

Instead of passively waiting for tenants to arrive, DTH+ is taking a proactive approach to bring them to market. Findings from the study will be released this summer and will inform next steps for attracting and supporting grocery options across Downtown.

and unfolding over the next several, the Public Realm Action Plan lays out a roadmap for Downtown to enter a new era—one defined by greater livability, stronger connections and a more dynamic public realm.

Q1 2025

Looking Ahead

31

About DTH+

Downtown Houston+ stewards the vision of Downtown as a center of global commerce and local culture and Houston’s heart for opportunity, excitement and joy. Downtown Houston+ represents a family of aligned entities – Central Houston, Inc., Houston Downtown Management District and Downtown Redevelopment Authority – which advance a shared mission to champion and enhance Downtown Houston as a connected and thriving place for everyone. For more information, visit downtownhouston.org.

Contributing Staff Brendan Harrison Research & Economic Development Coordinator

Cassie Hoeprich Director of Planning & Economic Development

Justin Jerkins Communications Specialist

Kristopher Larson President & CEO

Clint Self Creative Strategy Lead

Ann Taylor Director of Engagement

Candace Williams Executive Assistant & Board Liason

Contributing Photographers Justin Dalferes Leonid Furmansky

Houston Downtown Management District

Greater Downtown

District Boundary

Map Boundary

Houston Downtown Management District District Boundary

Aaron Hernandez James Kennedy Brandon Martin

69 10

Egidio Narvaez

HAMILTON ST

CHENEVERT ST

JACKSON ST

CRAWFORD ST

LA BRANCH ST

AUSTIN ST

FANNIN ST

CAROLINE ST

MAIN ST

TRAVIS ST

MILAM ST

LOUISIANA ST

TH

ST

SAN JACINTO ST

RUIZ

COMMERCE ST

FRANKLIN ST

SMI

Sources

CONGRESS AVE

PRESTON ST

45

PRAIRIE ST

DR L DR RIAL ORIA EMO MEM

TEXAS AVE

CAPITOL ST

RUSK ST

CoStar

WALKER ST

MCKINNEY ST

LAMAR ST

Downtown Houston+

BAGBY ST

DALLAS ST

K ST

POL

ST

69

BRAZOS

CHENEVERT ST

JACKSON ST

AUSTIN ST

LA BRANCH ST

CRAWFORD ST

CAROLINE ST

SAN JACINTO ST

SMITH ST

N

FANNIN ST

SST WS EEW RREW NDDR AAND

MAIN ST

45

La Calle

CLAY ST

DAL

TRAVIS ST

Houston First Corporation

LAS

W

ST. JOSEPH PKWY

Performing Arts Houston

PIERCE

45

Placer.ai SurveyMonkey

32

Appendix

If you have inquires related to the data and

To learn more about Downtown Houston+ Clean & Safe

information presented in this report, please contact

services, email operations@downtownhouston.org

cassie.hoeprich@downtownhouston.org.

or visit downtownhouston.org.

Quarterly Market Report

Our Boards of Directors Houston Downtown Management District (HDMD)

Downtown Redevelopment Authority (DRA)

OFFICER

NAME

TITLE / ORGANIZATION

OFFICER

NAME

TITLE / ORGANIZATION

Chair

Leslie Garcia Ashby

Partner, Ashby, LLP

Chair

Curtis Flowers

Executive Director, J.P. Morgan

Vice Chair

Robbi Jones

President, Kipling Jones & Co.

Vice Chair

Michele J. Sabino

Consultant, Third Sector Services

Treasurer & Investment Officer

Richard Torres

President and Executive Director, CHRISTUS Foundation for Healthcare

Treasurer & Investment Officer

Keith Hamm

Emeritus Professor of Political Science, Rice University

Secretary

Marian Harper

Vice President, Foundation Development, Houston Astros LLC

Secretary

Barry Mandel

President & Park Director, Discovery Green, Retired

Director

Crystal Allen

Managing Director, Transwestern

Director

Regina Garcia

Interior Design, Curator Consultant, Corporate Gifts

Director

Sean Alley

Vice President, Operations, Brookfield Properties Operated by CBRE

Director

James B. Harrison

Principal, Harrison Kornberg Architects

Director

Kinder Baumgardner

Managing Principal, SWA

Director

Kirby Liu

Managing Director, Lovett Group

Director

Genora Boykins

Asst. Regional General Counsel - Retired, NRG Energy, Inc.

Director

Tiko Reynolds-Hausman

Chief of Staff of Operations, Harris County Precinct 2

Director

Clay Crawford

Partner, Sears & Crawford L.L.P.

Director

William J. Taylor, III

Director, Development and Infrastructure, Harris County Precinct 1, Retired

Director

Marcus Davis

Owner, Kulture

Director

Jacques D’Rovencourt

General Manager, Hilton Americas-Houston

Director

Kelly Foreman

Executive Vice President, Amegy Bank

Director

Irma Galvan

Owner, Irma’s Original

Director

Gilbert A. Herrera

President, Herrera Partners

Director

C.C. Huang

CPC Corporation

Director

Angus Hughes

Executive Director, Cushman & Wakefield

Director

Antoinette M. (Toni) Jackson

Principal, The Banks Law Firm

Director

Lacee Jacobs

Senior Vice President, Strategic Leasing & Advisory, Rebel Retail Advisors

Director

Roland Kennedy

Internal Stakeholder Manager, Corporate Real Estate, Chevron

Director

Sean Liu

Head of Legal, Lionstone Investments

Director

Benjamin Llana

Vice President - Development, Skanska

Director

Nick Massad III

Senior Vice President of Development, American Liberty Hospitality

Director

Sherea McKenzie

Executive Director, J C Hester House

Director

Kenny Meyer

President, MC Management & Development

Director

Randy Pryor

Vice President, Distribution Operations, CenterPoint Energy

Director

Edna Ramos

Downtown Property Owner

Director

Frem Reggie

Managing Director, Hines

Director

John Schafer

Managing Director, Hyatt Regency Houston

Q1 2025

Appendix

33

Our Boards of Directors Continued Central Houston, Inc. (CHI) OFFICER

NAME

TITLE / ORGANIZATION

OFFICER

NAME

TITLE / ORGANIZATION

Chair

Stephanie Burritt

Principal | Managing Director, Gensler

Director

Steven J. Kean

President & CEO, Greater Houston Partnership

Vice Chair & Treasurer

Alex Jessett

President and Chief Financial Officer, Camden Property Trust

Director

Julie Luecht

Office Managing Principal, KPMG LLP

Secretary

David Ruiz

SVP, Community Relations, Bank of America

Director

Ira Mitzner

President & CEO, RIDA Development Corp

President & CEO

Kristopher Larson

President & CEO, Central Houston Inc.

Director

Niloufar Molavi

Global Leader Oil & Gas, PwC

Director

Dr. Loren Blanchard

President, University of HoustonDowntown

Director

John Mooz

Senior Managing Director, Hines

Director

Ric Campo

Chairman & CEO, Camden Property Trust

Director

Stephen Newton

Managing Director/Area Manager, Russell Reynolds Associates

Director

Dilip Choudhuri

President & CEO, Walter P Moore

Director

Hong Ogle

Houston Market President, Bank of America

Director

Priya Coffey

Partner, Jackson Walker

Director

Jessica O’Neill

President, Houston Dash & Dynamo

Director

Matt Damborsky

EVP, Skanska USA Commercial Development

Director

Travis Overall

Executive Vice President, Brookfield Properties

Director

Johnathan J. Edgeller

Managing Director & Region Manager, JPMorganChase

Director

Kathy Payton

President & CEO, Fifth Ward Community Redevelopment Corporation

Director

Laura Edrington

Managing Partner - Houston Office, Troutman Pepper Locke LLP

Director

Daron Peschel

Sr. Vice President In Charge, Federal Reserve Bank, Houston Branch

Director

Mark C. Evans

Co-Chairman, Bracewell LLP

Director

Theola Petteway

Executive Director, OST/Almeda Corridors Redevelopment Authority

Director

C. Richard Everett

Chairman & CEO, Everett Interests

Director

Cody Schneider

Partner, Winstead

Director

Tilman J. Fertitta

Chairman & CEO, Landry’s, Inc.

Director

David Stevenson

SVP, Amegy Bank of Texas

Director

Jamie Flatt

Principal, Page

Director

Aaron Thielhorn

Houston Market Leader, Managing Director, Trammell Crow

Director

Bradley R. Freels

Chairman, Midway

Director

Amber Tierce

Corporate Affairs Manager, Houston, Chevron Corporation

Director

Adam Green

Shareholder, Baker Donelson

Director

Jennifer Wagner

Office Director & Studio Practice Leader, Education Partner, HKS, Inc.

Director

Fred B. Griffin

Co-Chairman, Griffin Partners, Inc.

Director

Jason Wells

President & CEO, CenterPoint Energy

Director

Hillary Hart

Executive Director, Theatre Under The Stars

Director

Melinda Yee

Director

Michael Heckman

President & CEO, Houston First Corporation

Houston Managing Partner, M&A Transaction Services, Deloitte

Director

Jeffery Hildebrand

Executive Chairman and Founder, Hilcorp Energy

34

Appendix

Quarterly Market Report

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