Energy Corridor Real Estate Exec Predicts Submarket Pause

 

By Roxanna Asgarian

Eyes have been on the Energy Corridor as oil hits lows last seen during the 2009 recession. The submarket, which has seen a flurry of new development in recent years, has pulled back a bit as the energy industry battens the hatches and waits this slump out.

David Hightower, executive vice president and chief development officer at Houston-based Wolff Cos., has been instrumental in the growth of the Energy Corridor and has seen the booms and busts since he joined Wolff in 1980.

Although some experts have said the submarket will be hit hard during this downturn, Hightower remains generally optimistic.

“Long term, the Energy Corridor is still going to be a very strong market and a very desirable market to be in. We have a critical mass of highly educated and very talented people,” Hightower said. “Regardless of the price of energy, Houston is still the energy capital of the world, and the Energy Corridor is the industry’s downtown.”

He admits that 2015 and probably 2016 will be slow for the area, but said deals are still being done.

“2015 is going to be a quiet year,” Hightower said. “Only three things will drive transactions – mergers and acquisitions, lease renewals and companies moving to town,” noting that companies still were relocating to Houston, although not at the same pace.

Hightower also said that the submarket was at the cusp of overbuilding and this period serves as a much-needed pause.

“Had we gone another two years at 100,000 jobs, we would have definitely overbuilt,” Hightower said. “This pulled us back from the cliff.”

He added, “It won’t take much time to absorb once it kicks back up.”

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