Business

East Side Real Estate Prices Spike In Wake Of Industrial Construction Boom

Downstream oil and gas firms are spending billions to develop facilities on the Texas Gulf Coast. That’s affecting not just industrial real estate prices, but those of residential and retail property as well.

The boom in downstream oil and gas development is causing a spike in real estate prices on the East Side. Industrial properties from just east of downtown all the way to Galveston have risen in price by 25 percent or more over the last two years.

“You’re seeing 95 percent occupancy rates in many existing projects,” Mark Sikes, a principal with real estate valuation firm Deal Sikes & Associates says, “which then is the catalyst to developers, saying that we need more product in the marketplace.”

That industrial development is having a spillover effect on retail and residential construction, as blue-collar employment rises. Sikes points to Baytown’s San Jacinto Mall as an example.

“San Jacinto Mall, you know, that was somewhat of an eyesore, is now undergoing a massive redevelopment project, just showing that there’s purchasing power on the East Side that’s been untapped or undersupplied for years,” Sikes says.

Refiners and petrochemical firms are spending more than $35 billion dollars to build out facilities along the Texas Gulf Coast, according to the Port of Houston Authority. Land in business parks with railroad service is in particularly high demand, as Greater Houston scrambles to prepare for a jump in trade tied to the expansion of the Panama Canal.

Share

Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media’s coverage of national, state, and local elections. He also reports on major policy issues before the Texas Legislature and county and city governments across Greater Houston. Before taking up his current post, Andrew spent five years as Houston Public Media’s business reporter, covering the oil...

More Information