No the Texas state bird isn't the crane - but the big energy-driven metro is dotted with quite a few commercial construction sites including several speculative office developments. It's a clear signal that business expansion in this historically boom-and-bust local economy is filling up spaces vacated amid the Great Recession - from small-cap to high-rise.
While recovery of the nation's economy appears to be sputtering along at best - with more negative news than glad tidings in recent months - the decent expansion under way in Houston's key energy and technology sectors exemplifies the encouraging "green shoots" generating jobs and space absorption within select industries in several metros and regions.
Notwithstanding the generally slowing economic expansion and stagnating employment, we're seeing solid growth in predictable and perhaps surprising sectors and locales. While the strong rebound in Big Apple hospitality properties hasn't exactly caught anyone off guard, one might not expect the fast-strengthening trade activity boosting warehouse demand at most ports along the Mid-Atlantic and Carolinas coasts.
Likewise the nice comeback in auto-related manufacturing activity is predictably ranging well beyond Michigan to industrial centers in Ohio and western Pennsylvania. But the conventional wisdom might not extend to the sector’s brisk hiring that's bringing lots of Kansas City-area manufacturing properties back to life.
No one who's been through multiple business cycles will scratch his or her head at the strong technology-related research, development and manufacturing bounce-back leading to frantic leasing - and considerable new construction - in Silicon Valley. But eastern tech Mecca Boston and surrounds have seen resilient growth - generating surprisingly hefty manufacturing-space absorption - in an arguably unrelated sector: primary metals manufacturing.
As is the case with Boston-area metals, exports to foreign markets are driving activity filling up industrial space in and around the more southerly Atlantic ports. Actually growth in both imports and exports are generating near-record container tonnage levels in the key Charleston and Baltimore ports, as well as the Chesapeake mouth markets Norfolk, Newport News and Virginia Beach.
A nice benefit for warehouse owners in the Charleston vicinity: industrial vacancies have returned to single digits - and in fact to the lowest levels since late-2007. Quarterly net absorption is running well over 1 million square feet, and roughly that much new space is under construction, the local Avison Young (formerly Grubb & Ellis WRS) research team reports.
Agricultural equipment has been the hot export product at these ports of late, while automobiles (and parts) and paper products top the import-growth list.
While higher technology has become a Beantown economic staple, the area is seeing a nice bump in another manufacturing sector requiring engineers and skilled laborers. Companies that smelt, refine and mold primary metals from ore, pig and scrap iron are hiring - and absorbing manufacturing space.
Here too a lot of offshore buyers are helping drive the growth. To wit, the combined value of primary metals products exported from the region expanded by a hefty 150 percent during this year's first quarter, compared to the year-earlier period.
Accordingly even as the greater Boston marketplace's warehouse sector has been hampered of late by several simultaneous large consolidations, the manufacturing category has averaged well over 150,000 square feet of positive absorption over the past three calendar quarters, reports Richards Barry Joyce & Partners.
The nice rebound in auto manufacturing is generating jobs and industrial space absorption not just in and around struggling Motown, but in other rebounding metros in Ohio and western Pennsylvania. In fact as Colliers reports, auto parts manufacturers and related suppliers represent the most significant user category seeking industrial space in the Columbus vicinity.
Industrial property owners in Kansas City are likewise expecting better days ahead, as the big automakers have been gearing up to make even more product in the greater metro area - in turn generating hiring and absorption from all manner of suppliers.
Next year Ford will add production of its popular Transit Vans at the plant in Claycomo, where it already makes the best-seller F-150 pick-ups. And GM makes two top-selling models just across the river in the other Kansas City (Kan.): the Buick LaCrosse and the Chevrolet Malibu.
Even as the footprint of Manhattan's signature financial sector continues to shrink, hotels and other tourist-serving commercial properties are seeing solid activity. PricewaterhouseCoopers reports that the Apple's hotel occupancy rate jumped a strong 6.7 percent to 76.9 percent during the first quarter, compared to the year'earlier period, with gains continuing as summer approached.
On the opposite coast in Silicon Valley, fast-falling office vacancies are generating a noteworthy spate of sizable spec development projects. And tenant commitments have tended to come pretty quickly post-groundbreaking in a market that traditionally likes to see product before signing on.
Logically it's technology products and services that are generating jobs and footprint growth - although slowed activity in Europe and Asia are raising caution flags. Office vacancies Valley-wide have been falling by more than a percentage point per quarter of late - and the tightest submarkets are below 5 percent.
In the strategically located city of Sunnyvale alone, construction projects reflecting growth at Google, Apple, Amazon, Juniper and the like have already generated a new record for annual building fees and construction taxes - beating the 2007-08 fiscal year.
And then there's Houston, where strong office absorption (and spec development) are telling something of a Westside story - and an energetic one at that. Softening global demand for petroleum products notwithstanding, CB Richard Ellis reports that the Westside has accounted for four of every five square feet of office space absorbed in the marketplace this year - with one in three landing in the Energy Corridor.
The primary source of demand is no mystery here. Gulf Coast refineries are operating above 90 percent capacity, with ethylene and polyethylene attracting strong pricing. And as homebuilding around the country rebounds, demand for petroleum-based PVC piping is recovering as well.
