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This guest post is by Jonathan Bachrach, co-founder and COO of Turnkey Office Space.
With the global need for concerted environmentalism in the face of accelerating climate change, many wonder how cities like Houston, whose economic prosperity has largely depended on the oil and gas industries, will react and shift (if at all). Indeed, the city’s most recent oil downturn and accompanying spike in office vacancy rates doesn’t make a case for an economy shifting away from fossil fuels.
Dig a little deeper, however, and you’ll find a local economy that has been diversifying rapidly and embracing change over the past few years — change which can presumably be credited, in large part, to the influx of younger employees. From 2010 to 2015, Houston was one of the top 10 cities in the country to see the largest increase in millennial residents. The trend has continued into 2019; Houston is still considered one of the most promising cities for millennials to settle down in.
With accelerator programs and new startup initiatives (such as MassChallenge Texas and the new Innovation Hub in the Sears building) springing up in the city, it’s clear that Houston is taking meaningful, deliberate action to attract startups and young entrepreneurs from all over the country. Startups such as Lazarus 3D, a medical tech company that uses 3D printing to create realistic body parts and images, and GotSpot Inc, an AirBnB-type service that provides an online solution to finding temporary retail and meeting space, are just two examples of innovative startups in a growing range of industries that are calling Houston home.
To meet the growing demand for startup incubators and creative workspaces, some industry experts believe that empty subleases caused by the most recent oil downturn will be converted into coworking and shared office facilities and will help to stabilize Houston’s office market. At present, there are already well over 100 shared office and coworking locations in the Houston MSA, and major shared office provider Spaces (a subsidiary of Regus) is poised to acquire an additional 120,000 square feet by the end of 2019.
In terms of longer-term growth, local industry experts believe that there will be over 1 million square feet of coworking space within just a few years. Some estimate that coworking space will represent as much as 30% of the entire commercial real estate market in Houston by 2030 (up from the current .7%!) For growing companies, coworking poses a huge advantage — it provides community and flexibility conducive to innovation and growth.
As an oil and gas city, Houston has always reigned supreme. As an emerging tech center fostering innovative disruption, Houston still has room for growth. Still, this growth is rapidly occurring, and is likely to continue. If projections of coworking’s local growth are accurate, and the local economy keeps diversifying, Houston has a very bright future as a “silicon city”.
Turnkey Office Space is an office space search and consulting service that maintains a wide selection of workspace options throughout the country, with headquarters in New York City. SquareFoot and Turnkey work together to help a wider variety of companies and professionals find their perfect office space.