2018 was a big year for Houston commercial real estate, and 2019 may be its biggest yet. This year Houston became the inaugural partner for Microsoft’s Internet of Things initiative, and one of the first cities in America to be selected for the brand-new, high-speed 5G internet. And Texas Medical Center–the largest medical center in the world–unveiled plans for TMC3, a new $1.5B campus that’s set to break ground in 2019. Becoming the state’s center for technological innovation means growth, jobs and shifts in traditional office space.
The Greater Houston Partnership forecasted 71,000 new jobs in Houston in the coming year, with healthcare, construction and manufacturing accounting for more than a third. According to CBRE’s 2019 US Real Estate Market Outlook, there will, be moderate growth in the US office market, but considerable growth in Houston. The report projects 15,000 to 25,000 jobs, many of them in the technology sector, and that tenants in STEM industries will be key drivers of office space demand. But, while companies anticipate adding office space in 2019, they’ll be allotting less square footage per employee.
We’ve written before about the growing trend of coworking spaces. It’s still a small part of the market but it’s growing fast. Bisnow reported that Houston is the most affordable Texas market for freelancers. The rise of Houston as a tech hub, combined with the city’s relatively low cost of living, makes it appealing for small companies and startups to grow their operations in Houston, especially in flexible work spaces.
CBRE’s report also stated that technology and healthcare companies account for over 25% of space requirements by square foot. We expect all these new jobs in the tech and healthcare industries to raise demand for Houston office space, and we look forward to it.