As Energy Sector Disruption Continues, Other Industries Consider Waller
The energy downturn has forced many U.S. energy companies to reduce their office footprints, lay off their staff or even file for bankruptcy, a reversal of the strong growth the sector has enjoyed since oil prices last plummeted in late 2014.
Typical energy expansion and investment activity have fallen sharply, leaving many energy-adjacent firms in a more precarious position and reducing the pool of companies that can fill office and industrial real estate in the Houston region. But the news isn’t all bad for smaller cities on Houston’s peripheral, like Waller, which has seen a different mix of business inquiries emerge during the pandemic.
“We're seeing an uptick in other types of inquiries out at the Waller Industrial Park, ranging from construction materials to metal fabrication, automotive, even beverage bottling. So we think that's all a good sign,” Archway Properties Business Development Director Jason Smith said during a Bisnow webinar Sept. 3.
“We're very optimistic about getting different types, [a] good mix of manufacturing and industrial clients out there, above and beyond oil and gas,” Smith said.
Waller’s existing business mix includes energy, oilfield services and manufacturing companies. Some are contained within the area’s few business parks or occupy stand-alone facilities in the city’s extraterritorial jurisdiction, including the Daikin Texas Technology Park.
On a broader scale, Houston’s economy is continuing to diversify away from energy, with areas like healthcare, life sciences and technology becoming a bigger focus for regional leaders.
CBRE Vice President Alex Makris, who specializes in land, said that diversification is encouraging businesses and people to continue moving to Houston and the surrounding areas, despite its historic reputation of being a “boom or bust” city. In Waller, that is translating to a lot of additional interest from homebuilders, who are looking for affordable land in a well-performing school district.
“The blip in oil isn't affecting us [as badly] as most people would think, although we are energy-related, and we do have those losses,” Makris said. “But you're seeing a lot more distribution coming into the greater Houston area, and I think the [Highway] 290 corridor is well-positioned for that, and Waller.”
That isn’t to say the energy downturn hasn’t hurt business owners in Waller. Alegacy Group founder Bob Nickles owns Alegacy Business Park in Waller, and his main line of business is focused on manufacturing gas compressors for pipelines. Nickles said 2020 has been terrible for his business, primarily because of the downturn.
“Our core business is off two-thirds of where it would have been this year had we not gone through this experience, but it is what it is,” Nickles said.
HSI Services owner Darren Miller said his oilfield water management business in the city has been directly affected by the downturn.
“We're involved in supplying products to the midstream oil industry, the people that put pipelines and grounds and maintain them. It has been slow, and we deal [with customers] all over the country. So the quotations are slow, there's not as many projects,” Miller said.
However, Miller said he believes things will improve after the federal election in November and as the economy stabilizes.
At this stage, there is still a lot of uncertainty around how much longer it will take the economy to recover and when business will return to normal.
“We would rather be back at full speed, and whether that is mid-2021 or at a later date, who's to know? That'd be like forecasting the weather,” Nickles said.