Houston area to add massive growth of offices for energy projects
...During the 70's most of the growth in office space was in Downtown Houston. During this growth spate much of it is of campus type locations with a combination of mid rise and low rise building. The Woodlands and the Katy area seem to be getting a lot of this new growth. Anadarko built a 550,000 square foot building in the Woodlands. Exxon is also working on a campus like setting similar to that used by the high tech companies. While all of the jobs created are not oil and gas jobs, many of them support companies in that business.
One report anticipates the projects will help drive “massive domestic and international corporate relocations to Houston.” It says recruiting from oil and gas companies will lead to an increase in demand for offices to the tune of 2.5 million square feet to as much as 12.5 million square feet by 2016.
The report, compiled by Dallas-based Stream Realty Partners, identifies up to $120 billion worth of investments in refineries, pipelines and export terminals along the Gulf Coast by 2016
“Office jobs like engineers and project managers overseeing these projects are going to take seats in office buildings,” said Paul Coonrod, managing director of the Houston office division of the real estate firm.
Others say demand related to the new energy infrastructure won’t be nearly as high.
More than half of the jobs generated during the building phase of these infrastructure projects are for construction work, economist Barton Smith said. He also said it’s unlikely that all the proposed projects will be built. For example, federal regulators must approve the bulk of pending proposals to export liquefied natural gas.
“It doesn’t mean I don’t think this is a very interesting phenomenon occurring in Houston right now,” said Smith, professor emeritus of economics at the University of Houston. “It’s going to create income and wealth.”
The projects, he said, would have a strong economic ripple effect in other parts of this area’s economy.
The port would be a major benefactor if products made from natural gas are shipped abroad in large quantities.
Stream’s predictions for office space requirements are based upon estimates from energy companies that for every 1 billion cubic feet of liquefied natural gas exported daily some 20,000 jobs are created.
Based on an assumption that 10 billion cubic feet could be exported, that would translate into 200,000 jobs, half of which could end up in Houston, the company said. Of those jobs, 10 to 50 percent would be in offices, Stream estimates.
Houston’s position as a hub for the energy industry has already led to the start of a new boom in the local commercial real estate market.