Definitions of Net Absorption
- Net absorption is a measurement of the net change of the supply of commercial space in a given real estate market over a specific period of time. It is measured by subtracting commercial space vacated by tenants & made available on the commercial space market from total space leased up.
In the last quarter of 2017, the Houston office market experienced positive net absorption. The supply of available office space decreased, increasing rental rates. It is the basic concept of supply vs demand, less space available prices go up, more space available prices go down.