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Having an office here is important but there is a certain cache for Seattle when people state, Amazon-headquartered in Seattle, feeds into a perception. Would've been nice for people to say, Cart.com-headquartered in Houston.
Ever since this announcement, Cart.com has been promoting their Houston office all over their Instagram page. And they haven’t changed their listed headquarters yet. Makes you think all this is propaganda to lure in employeees.
Most likely, they’re doing a “dual headquarters” between the two and putting their name out there.
Here's news (OK, a bit of Woodlands self-promotion, but still) we all like to see. What I really hope for is that other lagging office areas with high quality buildings **cough cough Energy Corridor cough cough** can also gain similar appeal even if they don't have the same market promotion and (to be fair) original quality of land use planning.
Tech companies are discovering The Woodlands area as California exodus continues
By Florian Martin – Reporter, Houston Business Journal
Economic development officials in The Woodlands are seeing increased interest from technology companies from California and other places, and they say they are well positioned to attract more headquarters and branch offices.
Last year, New York City-based bitcoin company NYDIG signed a lease for an entire 26,530-square-foot floor at 9950 Woodloch Forest Drive, part of The Woodlands Towers at The Waterway, originally the headquarters for Anadarko Petroleum Corp.
And last month, Houston-based energy technology and infrastructure firm Lancium Technologies Corp. announced it will move into the same 32-story tower, where it will be leasing 30,000 square feet for its new headquarters.
Gil Staley, CEO of The Woodlands Area Economic Development Partnership, expects more firms to follow this year, more specifically biotech companies.
“I just got back from California, where I was talking to a cells manufacturing facility,” he said. “They are in life science or bioscience in the treatment of cancer through cell manufacturing, … (and) they're wanting to expand to this area.”
These companies are interested in The Woodlands, Staley said, because of its educated workforce — 55% of the working-age population has at least a bachelor’s degree, according to The Woodlands Area EDP.
Another reason, he said, is its location outside a densely populated city but still only a 30-minute drive from it.
“The pandemic has caused a tremendous interest in, if you will, a flight from the urban density,” Staley said. “And so, when they're trying to get out of those densely populated areas, suburban markets become very popular. It gives you more of a sense of openness.”
The Woodlands area also has plenty of amenities, shopping and entertainment, which works in its favor, he said. Plus, there's an attractive housing market and an abundance of Class A office space.
“It's an advantage for these companies to come in and negotiate very competitive lease rates, and our landlords are doing such to try to fill their buildings,” Staley said.
The Woodlands and other suburban areas help Houston’s case when it comes to recruiting any type of company, said Susan Davenport, chief economic development officer at the Greater Houston Partnership. The various areas give companies plenty of options in terms of regulations, costs, talent and other factors, she said.
“They can really hone in (on certain areas) and make a great decision for what they want to undertake,” Davenport said.
For a few years now, the Greater Houston Partnership together with the city of Houston and others have increased their efforts to attract tech and innovation. Davenport said that’s bearing fruit now. For example, venture capital in Houston has nearly tripled since 2016, according to the GHP.
And while Austin remains the No. 1 destination for tech companies from California, the Houston area is now competitive with the state’s capital, Davenport said.
Staley agrees, pointing to the rising cost of housing in Austin. In November, the median price for a single-family home in the Austin area was $470,000, compared to $314,000 in Greater Houston, according to the Austin Board of Realtors and the Houston Association of Realtors.
“It's really becoming out of reach for a lot of their workers to find affordable housing or find housing at all in the (Austin) area,” Staley said. “So we have that advantage that we have such an abundance of residential options for them in Montgomery County, certainly in The Woodlands area.”
And the more tech and life science companies move here, the better the chances are that more will follow.
Both economic development officials pointed to Hewlett Packard Enterprise Co. (NYSE: HPE) announcing plans to move its headquarters from San Jose, California, to City Place, the master-planned community formerly called Springwoods Village, in 2020. The new headquarters campus in City Place, just south of The Woodlands, is slated to open this spring.
“The fact that you have Hewlett Packard Enterprise … headquartered in our immediate area,” Staley said. “It will help us tremendously.”
That’s not news. That’s been going on for a while and COVID sped it up a bit. The only difference is that it’s being promoted more (most likely by Howard Hughes). This article is almost definitely propaganda paid by Howard Hughes. While it’s possible that HP + HPE are changing the way things go in the long run, the Woodlands isn’t even the leader bringing in these “mid sized” tech companies and branches of larger ones.
CityCentre + the general I-10 corridor has definitely done a bigger pull outside of those two. Amazon, Google, Infosys, Bill.com, Crown Castle, etc are clustered there instead of the northern suburbs.
That’s not news. That’s been going on for a while and COVID sped it up a bit. The only difference is that it’s being promoted more (most likely by Howard Hughes). This article is almost definitely propaganda paid by Howard Hughes. While it’s possible that HP + HPE are changing the way things go in the long run, the Woodlands isn’t even the leader bringing in these “mid sized” tech companies and branches of larger ones.
CityCentre + the general I-10 corridor has definitely done a bigger pull outside of those two. Amazon, Google, Infosys, Bill.com, Crown Castle, etc are clustered there instead of the northern suburbs.
Yeah, as I noted, the article was obviously instigated by either the Township or Howard Hughes (or both). Probably not coincidental to ExxonMobil's vacating Hughes Landing. But I like the PR approach of highlighting how non-O&G companies are finding space in high quality buildings there and the places you mention (though Crown Castle decided to build its own, for whatever reason).
I've been saying for awhile that the management districts, the real estate community, GHP, and others need to be more proactive about promoting the availability of high quality office buildings in good locations to tech and other industries from out of town. Instead there's been a kind of myopic PR focus for such users on the "Innovation Corridor" where the properties are either health science / biotech-specific (for obvious reasons) or mostly not yet built. Let's learn from the successes of places like CityCentre and The Woodlands in this regard. I have to wonder if it's a sort of inertia because so many of the big "wins" for office users in many of these places had historically been O&G-related or some other legacy industry, so that's what gets focused on to fill those buildings. Even the Amazon chase a few years ago seemed to focus on creating development that didn't already exist (not that I supported the dangling of incentives for that to begin with). Why do that when we've already got nice buildings? Admittedly some areas **cough cough Energy Corridor cough cough** could stand improvement from a walkable mixed-use environment perspective, but let's not let the perfect get in the way of a good opportunity.
Notably, CityCentre's offices had never been O&G-focused to my knowledge, until Marathon. Of course their buildings aren't that large either.
You do make a good point that the “very large” office campuses are building out instead of taking an easily available high quality. There’s some big exceptions though. Stewart Title Insurance (btw one of our most overlooked cos) took half of BHP’s original building. Engine opened a pretty big office in Four Oaks Place. Quanta Service is also opening a new office near Uptown.
All that being said, it seems Uptown is doing the best job in attracting already available space. For the Woodlands, Entergy’s lease was fairly sizable at 100K sq ft. That’s the exception I can think of for the woodlands.
Most of the “very large” new office campuses have been build outs. Good examples being HP, HPE, Academy, Crown Castle (this one has a good reason to do so though since real estate is important for them).
Something else no one is talking about. Chapter 313 is set to expire later this year. There is a bill to extend it but it’s uncertain. If it doesn’t get extended will these companies keep flocking to Texas? Just a thought.
You do make a good point that the “very large” office campuses are building out instead of taking an easily available high quality. There’s some big exceptions though. Stewart Title Insurance (btw one of our most overlooked cos) took half of BHP’s original building. Engine opened a pretty big office in Four Oaks Place. Quanta Service is also opening a new office near Uptown.
All that being said, it seems Uptown is doing the best job in attracting already available space. For the Woodlands, Entergy’s lease was fairly sizable at 100K sq ft. That’s the exception I can think of for the woodlands.
Most of the “very large” new office campuses have been build outs. Good examples being HP, HPE, Academy, Crown Castle (this one has a good reason to do so though since real estate is important for them).
Something else no one is talking about. Chapter 313 is set to expire later this year. There is a bill to extend it but it’s uncertain. If it doesn’t get extended will these companies keep flocking to Texas? Just a thought.
Yeah Uptown would seem like a more attractive place to setup shop post plandemic than areas like the Energy Corridor, especially at a time where most companies are at least doing a hybrid model. For one Uptown is relatively central, the drive into town for those in the suburbs won't take as long since rush hour has gotten better (plus the hybrid model so folks won't come in 5 days a week), and probably one thing that gets often overlooked is the surrounding neighborhood. Uptown still has a lot going on for the office workers to do midday, or leave work a little early to go check out a spot.
Working in the Energy Corridor isn't as "cool" as this. That stay on the corporate campus life isn't as appealing as working in an office located within an exciting neighborhood. I know my org is looking for exactly this once we find our office space (we call it finding a sexy location).
You do make a good point that the “very large” office campuses are building out instead of taking an easily available high quality. There’s some big exceptions though. Stewart Title Insurance (btw one of our most overlooked cos) took half of BHP’s original building. Engine opened a pretty big office in Four Oaks Place. Quanta Service is also opening a new office near Uptown.
All that being said, it seems Uptown is doing the best job in attracting already available space. For the Woodlands, Entergy’s lease was fairly sizable at 100K sq ft. That’s the exception I can think of for the woodlands.
Most of the “very large” new office campuses have been build outs. Good examples being HP, HPE, Academy, Crown Castle (this one has a good reason to do so though since real estate is important for them).
Something else no one is talking about. Chapter 313 is set to expire later this year. There is a bill to extend it but it’s uncertain. If it doesn’t get extended will these companies keep flocking to Texas? Just a thought.
Stewart Title was a relocation from Post Oak Central to BHP. Not sure if total space went up or down.
Regarding Chapter 313, it's primarily used for manufacturing facilities or perhaps places where there's a lot of high-value business personal property inventory that can't be cleared out on Jan. 1. Basically, facilities that are going to have a really high property tax bill because the replacement cost assessed value (which is how the appraisers have to consider them) is very high. These places may or may not have high employee counts, thought he wage levels can be pretty high for whatever jobs they do have. So, these are the kinds of facilities for which I would look for impacts.
Nevertheless, tax incentives like Chapter 313 are generally a bit down the list when it comes to site location criteria. Infrastructure (like pipelines, freight rail, highways) and labor pool typically take precedence. Incentives are often at the end of the screening process when it's narrowed down to 2 or 3 potential locations.
Yeah Uptown would seem like a more attractive place to setup shop post plandemic than areas like the Energy Corridor, especially at a time where most companies are at least doing a hybrid model. For one Uptown is relatively central, the drive into town for those in the suburbs won't take as long since rush hour has gotten better (plus the hybrid model so folks won't come in 5 days a week), and probably one thing that gets often overlooked is the surrounding neighborhood. Uptown still has a lot going on for the office workers to do midday, or leave work a little early to go check out a spot.
Working in the Energy Corridor isn't as "cool" as this. That stay on the corporate campus life isn't as appealing as working in an office located within an exciting neighborhood. I know my org is looking for exactly this once we find our office space (we call it finding a sexy location).
That's why I noted the walkable mixed-use issue for EC. Uptown has long been the premier mixed-use district in the city, and has become much more walkable in recent years. That same dynamic is a big reason for CityCentre's success as well, and a selling point for The Woodlands Town Center and to some extent Hughes Landing (the latter also has nice lakefront open space). It also helps Downtown, even if some of that mixed-use is underground.
That said, EC has nice (some heavily empty) buildings, Terry Hershey Park, access to the Katy, Memorial, and Inside the Loop residential labor pools, and isn't too far from CityCentre / Memorial City for more excitement. There's a nice selection of eating places within or adjacent to the EC as well, and Grisby Square is cool. "Sexy" or not, it should be heavily marketed as ready to receive a large-scale white collar employer relocation.
Stewart Title was a relocation from Post Oak Central to BHP. Not sure if total space went up or down.
Regarding Chapter 313, it's primarily used for manufacturing facilities or perhaps places where there's a lot of high-value business personal property inventory that can't be cleared out on Jan. 1. Basically, facilities that are going to have a really high property tax bill because the replacement cost assessed value (which is how the appraisers have to consider them) is very high. These places may or may not have high employee counts, thought he wage levels can be pretty high for whatever jobs they do have. So, these are the kinds of facilities for which I would look for impacts.
Nevertheless, tax incentives like Chapter 313 are generally a bit down the list when it comes to site location criteria. Infrastructure (like pipelines, freight rail, highways) and labor pool typically take precedence. Incentives are often at the end of the screening process when it's narrowed down to 2 or 3 potential locations.
Those two specifically are about the same but Stewart has other offices around the metro that they’ve been opening for different functions. After they almost got acquired by Fidelity, they changed their business model to serve a higher range of functions. Theyve also been acquiring just about every mid sized title company around the nation. Here’s a link to that. https://www.housingwire.com/articles...isition/?amp=1
Regardless, I was mentioning this as a new office that was leased rather than built from the ground up. And in general, the majority of the ”very large” ones seem to be going Uptown.
Regarding Uptown, in addition to the things you guys mentioned, I’m sure the general “luxury” tag of Post Oak/Uptown/River Oaks is appealing to these leases serve higher ranked officers. Something about 5 star hotels, high end stores and fine dining is appealing to the higher ranked officers.
And in regards to the Woodlands, it’s the closest in the metro you get to the “luxury” of Uptown. So I’m sure Howard Hughes will use this (and has already been using this) as a marketing gimmick.
Those two specifically are about the same but Stewart has other offices around the metro that they’ve been opening for different functions. After they almost got acquired by Fidelity, they changed their business model to serve a higher range of functions. Theyve also been acquiring just about every mid sized title company around the nation. Here’s a link to that. https://www.housingwire.com/articles...isition/?amp=1
Regardless, I was mentioning this as a new office that was leased rather than built from the ground up. And in general, the majority of the ”very large” ones seem to be going Uptown.
Regarding Uptown, in addition to the things you guys mentioned, I’m sure the general “luxury” tag of Post Oak/Uptown/River Oaks is appealing to these leases serve higher ranked officers. Something about 5 star hotels, high end stores and fine dining is appealing to the higher ranked officers.
And in regards to the Woodlands, it’s the closest in the metro you get to the “luxury” of Uptown. So I’m sure Howard Hughes will use this (and has already been using this) as a marketing gimmick.
I think the "luxury" emphasis is more on the housing (Uptown became Uptown because it's right between Tanglewood and River Oaks) than the retail and restaurants. Unless a business is serving a specific high-end clientele, I've never seen any evidence that an Hermes store and similar level of other retail businesses is a major influence on their location decision. Proximity to "executive housing", however, is often a very big deal.
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