In the first three quarters of 2012, 15 major office buildings were completed. Currently there is 3.9 million square feet of office space under construction. Over 90% is on the West side of Houston and the Woodlands (a community north of Houston).
Commercial real estate sales have been fast and furious and confirm investor’s interest in the market. The Shell Plaza, a 1.8 million square foot office complex, sold for $550 million. Last year, Shell renewed its leases of 1.3 million square feet at Shell Plaza.
Because Houston doesn’t have zoning laws, developers are able to build almost anything, anywhere in the city. Mark Cover (chief executive of Hines Development) said, “When you really get down to it, the city is market-zoned, because land prices are not based on zoning rights, they’re based on purely capitalistic, highest and best value. If you build the wrong product or build in the wrong place, the market is going to severely punish you.”
According to Jim Knight of Bury & Partners an engineering firm, the city develops in hubs due to market forces. Refineries and distribution centers are located near the Port of Houston, while other major companies are downtown or in a submarket. They typically stay in the same place for an indefinite amount of time.
Exxon is building its new complex on 385 acres near the Woodlands. In 2014 the company will bring 10,000 jobs there just from relocating from several million square feet in Houston and downtown. Businesses form Fairfax, Va. and Akron, Ohio, and a refinery from southeast Houston are also moving to the campus.
The Woodlands is quickly becoming a part of the Houston job market. New office projects range from 23,000 square feet to a 31 story, 550,000 square foot office tower; Anadarko is building the 31 story building. A 197,000 square foot office building is being built across the street from the Anadarko building.
With the job market booming and companies moving into the City, Houston will see an increase in people relocating.