Texas office at the end of Q3 2026 continues the pattern we've been flagging all year: trophy is quietly getting better, commodity is quietly getting worse, and the blended metrics obscure how divergent those two markets have become. Statewide office vacancy improved for the third straight quarter to 21.4% — but that number contains trophy Class A vacancy near 8% in Austin and Class C vacancy above 36% in commodity submarkets.
Sublease inventory declined for the seventh consecutive quarter to 26.9M SF — down from a mid-2024 peak of ~34M SF. Trophy Class A sublease has largely cleared; Class B/C sublease remains stubbornly elevated. The message is consistent: the flight to quality has stopped being a story and has become the market structure.
This report walks through Q3 2026 office metro-by-metro, with cap rate evidence from closed trades, sublease data, and CRECO's commentary on where the real opportunities exist — both for tenants seeking upgrade deals and for investors making non-consensus long-hold bets.
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What you'll walk away with:
- Q3 2026 Class A vs Class B office rents by metro and submarket
- Cap rate evidence — the still-widening spread between trophy and commodity office
- Sublease inventory trends and what the seven-quarter decline signals
- Office-to-residential and office-to-medical conversion economics with 2026 project examples
- Where the remaining office bright spots are — and where the avoidance zones remain
What's inside
- Executive summary — Q3 2026 office in five numbers
- Rents by class and submarket
- Cap rates and capital markets
- Sublease — the seventh quarterly decline
- Office conversion — the projects that broke ground in Q3
- Metro-by-metro commentary
- What we're telling clients