Building industrial strength From the cover
By the numbers
The overview
While industrial construction picked up in recent years, the o ce sector struggled during the COVID-19 pandemic. English said companies looking for 10,000 square feet of o ce space ve years ago are now looking for about 4,000 square feet instead. “A lot of the folks that had larger footprints for their o ce concept have downsized,” he said. “Very few of them have gone away from it entirely, but it’s just this interesting evolution of, ‘What does a particular type of business need?’” O ce occupancy in Cy-Fair was 77.9% in the second quarter of this year compared to indus- trial’s 89.1%, according to CoStar Group. Retail occupancy reached 96.9%, but it has not dipped below 94.5% in the last ve years.
In that same time, the Grand Parkway’s extension through the community and Hwy. 290 improvements have increased connectivity in the region. Oce, retail and industrial development follows residential growth as the demand for services and the local workforce grows, English said. On top of that, industrial demand has increased as more retailers have moved their businesses online, and have needed warehousing and distribution space. “When you drive past what we still call a retail center, I jokingly tell people all the time it needs to be just called ‘services,’ because there’s restaurants, nail places, hair places— things you have to go to a location to do—but very little true retail these days,” English said.
Joel English, founder of northwest Houston- based Texas Commercial Real Estate Services, said he believes businesses are attracted to the Cy-Fair area because its economy is diverse, spanning industries from technology and medicine to manufacturing. “We have a very broad economy, and other parts of the country do not share that. For years, we didn’t; it’s just evolved into that,” English said. Additionally, English said he has seen the region’s cost of living, lack of state income tax and overall business environment attract companies relocating from California, among other states. The population within Cy-Fair ISD’s boundaries grew about 25% from 2012 to 2022, according to the U.S. Census Bureau’s American Community Survey 5-year estimates.
Occupancy rates
Q1 rates:
O ce
Retail
Industrial
Proposed and under-construction commercial real estate
100%
95.8%
95.2%
O ce
Retail
Industrial
88.6%
7 properties 651,700 sq. ft.
21 properties 642,955 sq. ft.
29 properties 8.08M sq. ft.
90%
88.7%
85.7%
NOTE: SOME LOCATIONS REPRESENT MULTIPLE BUILDINGS AT THE SAME SITE.
80%
77.6%
70%
99 TOLL
0%
2019
2020
2021
2022
2023
2024
N. ELDRIDGE PKWY.
R D .
Rental rates per square foot
249
1960
Q1 rates:
O ce
Retail
Industrial
Prologis Legacy Point
$22.22
$25
$22.35
$20
$19.31
Northwest Hyundai
$18.96
$15
D
Kelsey-Seybold Northwest Campus
$10
290
FAIRBANKS N. HOUSTON RD.
$9.99
529
$5
$6.97
6
$0
N
2019
2020
2021
2022
2023
2024
SOURCE: CALDWELL COMPANIES’ ANALYSIS OF COSTAR GROUP DATACOMMUNITY IMPACT
SOURCE: CALDWELL COMPANIES’ ANALYSIS OF COSTAR GROUP DATA COMMUNITY IMPACT
18
COMMUNITYIMPACT.COM
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