In one lane, office still has something many people assumed was gone: pricing power. In the other, deals still happen—but they happen because the landlord offers enough flexibility and economics to make the decision easy.

That’s not a contradiction. It’s the market clarifying what it values now.

Two markets: pricing power vs. terms-driven

 The best way to describe Houston office right now is this:

• Pricing power lane: newer, better-positioned, “relevant” buildings that reduce friction for tenants
• Terms-driven lane: commodity/older product where leasing is still possible, but the deal is often built around incentives and flexibility

Owners feel this difference immediately in the term sheet. Investors feel it in underwriting—because the spread shows up in downtime assumptions, concession loads, tenant retention, and the confidence of future cash flow.

The 2026 underwriting shift: “relevance” is now a risk factor

This is the point many miss: market-wide averages still matter, but they’re becoming less predictive when performance is increasingly asset-specific.

In 2026, “relevance” is no longer a soft concept. It’s a measurable risk factor that impacts:

• tenant decision speed
• renewal probability
• rent resilience
• capex requirements
• and ultimately, the stability of NOI

A building that helps tenants solve real operational problems—hybrid rhythms, talent attraction, collaboration, convenience—doesn’t have to win solely on price. A building that doesn’t must compensate somewhere else.

The pro-owner truth: the “in-between” strategy is the danger zone

From an owner/operator view, the market is surprisingly honest right now. It’s effectively asking every building the same question:

What lane are you in—and are you priced accordingly?

The highest-risk strategy is trying to sit in the middle:

• asking premium-ish rents
• with commodity product
• without a clear repositioning story

That mismatch is where you see avoidable pain: longer downtime, deeper incentives, and leases that feel like wins until you model the real economics.

Owners who are navigating this well are generally doing one of two things:

1) Defend the premium.
They invest in relevance: operations, experience, amenities that tenants actually use, and flexibility that removes objections.

2) Own the value lane.
They lean into what value tenants want most: functionality, predictable costs, and deal structures that reduce risk—without pretending the building is something it isn’t.

Both strategies can work. What doesn’t work is ambiguity.

The investor takeaway: don’t confuse “leasing” with “durability”

Leases are being signed in Houston. The more important question is the durability of those leases.

From an investor lens, the 2026 skill is separating:

• momentum leases (priced/incentivized to win today) from
• durable leases (supported by building relevance and long-term tenant fit)

That separation affects what you can safely assume about renewals, rollover, and future leasing friction. In this market, a lease can be “good news” and still be a warning signal if the economics imply the building is buying occupancy rather than earning it.

What to watch in the next 90 days

If you want to see which lane Houston office is moving toward, watch signals that reflect confidence:

• Renewals: are tenants staying, resizing, or shopping?
• Concession intensity: are incentives easing or escalating?
• Lease terms: shortening suggests optionality; stabilizing suggests confidence
• Repositioning activity: which assets are being “re-written” and which are being discounted
• Time-to-lease: velocity is the tell

Bottom line

Houston office isn’t a single story in 2026. It’s a sorting process.

And that’s good news for owners and investors who can make a clear choice: defend the premium or own the value lane—then execute like they mean it.

Question: In your submarket, are you seeing more owners win by upgrading relevance… or by leaning into value and flexibility?