Low Oil Prices Not Expected To Harm Houston Commercial Real Estate Market

Houston commercial real estate

The cheap price of gas certainly has many people smiling from ear to ear. Those prices are great for your monthly auto bills, but what does it mean for oil producers around the nation and globe? We definitely see a correlation between Houston commercial real estate market trends and the performance of the oil and gas industry. The good news is that we believe, as do many other experts, that Houston’s commercial real estate market will be largely unaffected by the current downturn in the oil and gas industry.

Oil and Gas Industry Boosts Houston’s Economy
There’s no denying that Houston owes a great deal of its economic success since the Recession to the oil and gas industry. In recent months, global oil prices have dipped to their lowest rates in years—less than $50 a barrel—putting pressure on oil producers all over the globe. Saudia Arabia and the OPEC countries clenched their markets, Mexico’s national oil industry took heavy blows, and the Russian ruble plummeted in worth. But in the United States, oil and natural gas production have outpaced all other domestic industries for the past five years; since the Recession, the energy sector has added more than 250,000 jobs.

Why Houston Commercial Real Estate Is Doing Fine
Houston commercial real estate experienced downturns in the past, and as a result, lessons were learned and commercial real estate in Houston is generally very well capitalized. The supply and demand channels are in check as evidenced by the 90% occupancy rates without an overwhelming surplus due to new construction. Additionally, the direct asking rates have held up during the last three downturns, and the same resilience is expected this time around.

How To Use This Information
You can count on your experts at Capital Realty Group to monitor the Houston commercial real estate industry and to have the latest info and advice. We look forward to hearing from you! You can reach our Houston office at 713-452-9000 or contact us online.

There’s no doubt, the price of oil is unpredictable. How have you seen the Houston commercial real estate market change to safeguard against fluctuations in the economy?

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This post was written by Capital Realty