Houston, TX Economic Overview
Everything is bigger in Texas and Houston is a prime example of this. Located near the Gulf of Mexico in the southeastern part of the Lone Star State, and with a population of 2.3 million, Houston is the most populated city in Texas, and the 4th most populated city in the U.S.
Sprawling over 667 square miles, Houston hosts a broad base of businesses in the energy, manufacturing, transportation, aeronautics and health care industries, and has more Fortune 500 headquarters than any other city in the country. Add to this the nearly 18 million multi-national tourists that visit Houston each year and you can see why the Houston commercial real estate market is a consistent performer year after year.
As the 5th most populated MSA in the U.S., the Houston metropolitan area is known around the world for its oil, natural gas and renewable energy industries, its biomedical research and aeronautics corporations, and is a main manufacturing center of oilfield equipment. The Port of Houston is one of the top 10 largest ports in the world, and with its two international airports and one domestic airport, the Houston area is one of the top U.S. exporting markets, surpassing even New York City.
Houston, TX Commercial Real Estate Market
Key to Houston's economic success is the fact that the city has multiple business districts as centers of employment and commerce. In addition to the Downtown Houston core, the Uptown, Energy Corridor and the Texas Medical Center business districts of Houston all contribute to the nearly 1.2 billion square feet of office, retail and industrial space in the market.
Downtown Houston commercial district is just under 2 square miles in size and includes the Warehouse, Historic, Ballpark, Skyline, Theater and Medical sub-districts. Over $4 billion has been invested to transform Downtown Houston commercial real estate into a vibrant city center with entertainment venues and efficient mass transit.
The Uptown Houston commercial real estate market, with nearly 23 million square feet of office space, is the 17th largest business district in the U.S. and is home to over 2,000 companies including General Electric, Dow Chemical, Marathon Oil and the Bechtel Corporation. There are over 5 million square feet of retail space in Uptown Houston and the district is host to The Galleria, the largest shopping center in Texas, along with a multitude of trend-setting stores, eateries and entertainment venues.
The Energy Corridor has historically been one of the strongest Houston office markets and is home to over 300 companies, employing over 94,000 people in total. With over 26 million square feet of office space, the district is home to the national or international headquarters of BP America, ConocoPhillips and Citgo among many others. Due to the significant increase in construction, the Corridor has tripled its property value from $600 million to well over $2 billion.
Texas Medical Center district is the largest medical center in the world, with 54 medicine-related hospitals, research centers, medical and nursing schools. Each year, 13,600 heart surgeries are performed, 25,000 babies are delivered and 8 million patients visit. The District is also home to the Texas Children's Hospital and the MD Anderson Cancer Center, both the world's largest facilities of their type.
Houston, TX Office Rental Rates ($/SF/year)
Data provided by Yardi Matrix, for properties larger than 50K SF.
Houston, TX Office Sales
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Houston, TX Commercial Inventory Breakdown
Total: 230,848,305 SF
By square footage range:
- 50k to 100k SF: 28,507,458 SF / 12.35% of total office
- 100k to 500k SF: 123,510,317 SF / 53.5% of total office
- 500k to 1M SF: 40,421,919 SF / 17.51% of total office
- > 1M SF: 38,408,611 SF / 16.64% of total office
- Class A+: 13,749,537 SF / 5.96% of total office
- Class A: 114,319,525 SF / 49.52% of total office
- Class B: 83,106,905 SF / 36% of total office
- Class C: 2,291,234 SF / 0.99% of total office
Total: 204,790,500 SF
By square footage range:
- 50k to 100k SF: 7,324,944 SF / 3.58% of total industrial
- 100k to 500k SF: 162,573,672 SF / 79.39% of total industrial
- 500k to 1M SF: 24,731,913 SF / 12.08% of total industrial
- > 1M SF: 10,159,971 SF / 4.96% of total industrial
- Class A: 86,206,467 SF / 42.09% of total industrial
- Class B: 105,688,527 SF / 51.61% of total industrial
- Class C: 7,057,012 SF / 3.45% of total industrial
Employment in Houston, TX
Houston has received top ranking in Kiplinger's Best Cities List, has ranked 4th in local technological innovation, has ranked 1st in Forbes magazine's Best Cities For College Graduates (in fact nearly 81% of college grads decide to stay in Houston after getting their degrees), 1st in Forbes' Best Cities To Buy A Home and 1st for cities where paychecks go the furthest. With awards like these, it's no wonder Houston is able to consistently attract a well-educated, diverse and highly qualified workforce.
The top four employment sectors in Houston are:
- Trade, transportation & utilities including United Airlines with 15,000 employees and H-E-B with 24,000 employees;
- Professional & business services including Schlumberger with 12,000 employees and JP Morgan Chase with 8,500 employees;
- Health & educational services including Memorial Hermann Health System with 21,000 employees and the MD Anderson Cancer Center with 21,000;
- Manufacturing including Baker Hughes with 5,700 employees and National Oilwell Varco with nearly 9,000 employees.
Because the city has multiple business districts, the demand for both residential housing and commercial space in Houston is widespread throughout the metropolitan area.
Education in Houston, TX
Over 80% of the university students that graduate in Houston stay in Houston. The city boasts 4 distinct state universities, including the University of Houston and Texas Southern University, with total enrollments of over 72,000, endowments of over $700 million and annual research expenditures of over $130 million.
In addition to the state university system, Houston has three community college systems, eight sectarian and non-sectarian universities, three law schools–including the University of Houston Law Center, one of only two top-tier law schools in Texas, and 12 public and private health institutions, including the Baylor College of Medicine and the Texas Children's Hospital.
The Houston Independent School District is the 7th largest school district in the U.S. and one of 17 school districts in Houston. Moreover, the Houston MSA has over 300 private schools, charters schools, magnet and vanguard schools.
Commuting Time in Houston, TX
You might imagine that a booming city like Houston, with multiple employment hubs and widespread educational facilities would have bad commute times. And you would be right. The good news is that the Houston transportation system is intelligently expanding to alleviate this congestion.
- Houston's highway system utilizes a hub-and-spoke configuration of 739 miles of multiple loops;
- The Metro light rail service runs from the Downtown business district to the Texas Medical Center district and is currently expanding with 5 additional sections;
- Houston bike commuters have access to over 500 miles of interconnected network, and are the largest group of bicycle commuters in the state of Texas.
- Total Population2,267,336
- Male Population(50.1 %) 1,135,634
- Female Population(49.9 %) 1,131,702
- Median Age32.90
- Average Household Income$79,344
- Median Household Income$49,399
- Median Income Under 25$29,186
- Median Income 25-44$50,613
- Median Income 45-64$56,009
- Median Income Over 65$40,215
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