Experts Say that Houston Commercial Real Estate Market is in Great Shape

Houston's commercial Real Estate shows positive growth

The commercial real estate market in Houston is growing as businesses expand.

It is easy to dismiss the occasional voice in the wind when it comes to the health of the commercial real estate market in Houston, but when multiple experts in the field speak out and have only positive things to say, we think it’s time to listen! Experienced commercial real estate executives are lining up to invest in Houston and if their arguments don’t persuade you, perhaps the level of their investment will.

Market Impressions

Simply put, the Houston commercial real estate market is in great shape overall. According to most experts, Houston is one of the best and most consistent cities in the United States when it comes to doing business in the sector. In fact, they can’t find a single major issue that promises to slow down growth, let alone stop it. Admittedly, there are macroeconomic factors that can’t be controlled, but there is no sign of over-building on the commercial side. While the city has not completely left the economic storm behind, it has weathered it and is in prime position to enjoy a boom.

Evolution of the Market in Houston

The amount of foreign investment and institutional interest means that Houston is well on its way to being a ‘core’ market and getting mentioned in the same breath as Chicago, Los Angeles, New York, and San Francisco. The Energy Corridor was always the city’s strength and now this is helping it to develop a big reputation in the world of commercial real estate.

Houston once had a negative reputation because of the city’s economic crash in the late 1980s. This occurred due to overbuilding, but in the modern era there is far more discipline in the market. The city now has a fantastic level of diversity and this has led to a stabilized market and discipline in the capital markets, things that were missing during the 80s.

The Future

It seems as if companies are becoming more productive and profitable in their space. The need to reduce costs and shrink carbon footprints has helped to change the workplace environment and now there are fewer dedicated uses for particular spaces. It seems as if a trend of the future will be to reduce the square footage used and this should see the creation of smaller buildings.

There are of course still a number of offices in Downtown Houston that fit the 1980s profile, with four parking spaces per 1,000 square feet and the average square footage per person is in the 250-300 range. This could shrink to 150 square feet per person, which might cause a problem with parking in theory. However, given the new way of doing business worldwide, it is likely that staff will be moved around the country and the world so 15-20% of space could be unused at any one time.

Ultimately, Houston is in charge of its own destiny as it outperforms most cities in the country. The number of dissenting voices is dwindling as almost everyone accepts that Houston and Texas will be near the center of the commercial real estate market going forward.


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