Cy-Fair How
Pre-pandemic perspective
Returning to the workplace
Few local residents worked from home in 2019, when the average commute to work was 32 minutes.
Houston and other Texas cities are leading the nation’s top metros in the return to in-person work. Data shows the percentage of o ce employees working in person.
1.0 3.0% Worked fromhome pre-pandemic 3.1 5.0%
works
average top 10 U.S. metros
Houston
5.1 7.0% 7.1%+
Average commute
100% 90% 80% 70% 60% 50% 40%
98% in February
Working from home was an adjustment for most Cy-Fair residents at the start of the pandemic, and data shows many continue to work remotely more than a year later.
27.7mins.
34.7mins.
77070
77429
24%by end ofMarch
30.4mins.
77433
20% 30% 10% 0%
77065
77064
77095
37.9mins.
29.5mins.
77040
March 2020
May 2020
July 2020
Sept. 2020
Nov. 2020
Jan. 2021
March 2021
34.7mins.
29.4mins.
SOURCE: U.S. CENSUS BUREAU COMMUNITY IMPACT NEWSPAPER
SOURCE: KASTLE SYSTEMS COMMUNITY IMPACT NEWSPAPER
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“WE DIDAWORLDWIDE TEST RUNOFWORKING FROMHOME, AND I THINK NOWPEOPLE KNOW IF THATWORKS FOR THEMOR IF IT DOESN’T.”
“PEOPLEWANT TORETURN TOAWORK ENVIRONMENT THAT THEY FEEL IS SAFE, AND SO I THINKPEOPLE ARE JUSTMORE CAUTIOUS UNTIL THE VACCINE GETS FULLYROLLEDOUT.”
“People want to return to a work environment that they feel is safe, and so I think people are just more cautious until the vaccine gets fully rolled out,” said Mike Slauson, a Houston-based general manager with Kastle Systems. “I think ... mid-sum- mer, early fall—that’s when we’re going to start see- ing some ramp-up as more people get vaccinated.” Commercial real estate experts said they expect to see an uptick in Houstonians returning to in-per- son work as the spread of COVID-19 diminishes. But after months of using remote collaboration plat- forms, that return will likely look di erent than it did pre-pandemic. Miranda Hadamik, senior vice president of invest- ment and operations at Caldwell Companies, said she believes a portion of the workforce will seek to work closer to home—whether from a coworking site or one of the many new local o ce condos. “We did a worldwide test run of working from home, and I think now people know if that works for themor if it doesn’t,” she said. “Employers canmake those informed decisions and create solutions. Peo- ple can gure out how to have that exibility and that work-life balance where you’re spending more time at home than commuting.” Even before COVID-19, local experts said o ce vacancies in Houstonwere notably high due to over- building for the energy industry before the 2014 oil and gas downturn. Vacancy rates in Cy-Fair’s o ce market were on the rise before the pandemic and reached 18.5% by the rst quarter of 2021. Leslie Martone, president of the Cy-Fair Houston Chamber of Commerce, said companies continuing telework policies might save some costs, but she expects to see more Cy-Fair residents return to the o ce setting as the COVID-19 vaccination rolls out. About 25% of Cy-Fair residents were fully vaccinated against COVID-19 as of press time, according to the Texas Department of State Health Services. “I think there will always be a telecommuting component to our ‘new normal,’ but those that I have visited with said they miss the face-to-face
MIRANDA HADAMIK, SENIOR VICE PRESIDENT OF INVESTMENT AND OPERATIONS AT CALDWELL COMPANIES
MIKE SLAUSON, GENERAL MANAGER WITH KASTLE SYSTEMS
more tenant improvement dollars and hold the rate so that they don’t long-term devalue their building. … They’re just accelerating the leasing by saying to the tenant, ‘We’ll give you the rst year free on a 10-year deal.’” Eddy said retail real estate has been more resilient this past year, but local o ce vacancy rates have been signi cant as businesses choose not to renew or break their leases. “Companies that used to have larger o ce spaces have realized that with all of our new capabilities technology-wise, that even if people could come back they don’t want to, and they’re actually more e cient from home,” she said. “Basically, workers are available 24/7 now. You never leave your o ce; your o ce is your home.” But even as companies downsize, Eddy said most still want to keep some sort of a home base to send cli- ents and at least have a conference room formeetings. The focus is now on necessities compared to expan- sive facilities with multiple private o ces, she said. Local businesses respond Jerry Mogyorody, president and CEO of o ce furniture company Cubiture, said sneeze guards and high-wall cubicles with glass and doors have become popular as businesses look to safely reopen. But despite these trends, sales have been down about 40% for the local company. “I still think there’s tons of businesses that haven’t gone back yet. When I leave my house in the morn- ing, I’m the only one going to work at 6:15,” he said.
relationships,” Martone said. State of themarket
Colliers Houston President Patrick Du y said before COVID-19, Houston had the highest o ce vacancy rate of anymajor city in the U.S., largely due to a rush in construction to accommodate upstream energy companies expanding from about 2010-14. “We build whole buildings for these large com- panies and then the crash hit, and they never even took up occupancy; they just dumped it in the sub- lease market,” Du y said. “And we’ve never recov- ered from that.” Many Cy-Fair residents commute into Houston for these jobs, and plenty of the ancillary energy services operate from the suburbs, so local residents feel the ripple e ects from energy downturns as well, said Tracy Eddy, principal and associate broker with Texas Commercial Real Estate. Between complications in the oil and gas industry and COVID-19, Du y said depending on the submar- ket, it could take at least 10 years to stabilize. Cy-Fair’s o ce market has grown by 1.1 million square feet in the last ve years, and rental rates have remained between $21.70-$22.80 in that time, according to Caldwell Companies. Du y said while rent costs might not be drastically changing, land- lords are o ering more generous incentives in hopes to attract tenants to ll their empty space. “Rental rates will remain fairly static,” Du y said. “Most landlords are trying to give more free rent and
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COMMUNITY IMPACT NEWSPAPER • COMMUNITYIMPACT.COM
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