Houston's recent office sector struggles have made headlines in all the wrong ways, but CBRE Head of Research Spencer Levy is optimistic about the Bayou City based on one crucial statistic.
"Over the next 10 years, Houston is projected to add the second most jobs in the U.S. behind Dallas," Levy said. "Take any stat you want, that's the number that matters."
Houston is uniquely positioned to take advantage of an expected healthcare boom. The Bureau of Labor Statistics predicts healthcare will be the No. 1 job driver in the U.S. over the next 10 years. Demand for healthcare-oriented real estate in the form of care facilities, medical office buildings and retail will continue to drive development, Levy said.
Cranes over the Texas Medical Center foreshadow Houston's growth in healthcare real estate. Memorial Hermann, Houston Methodist, Greystar, Baylor, CHI St. Luke's and others have invested billions into construction around TMC. The TMC is reporting roughly $3B in construction projects underway within its boundaries.
Healthcare real estate demand is an important factor in Houston's suburbs as well, as hospital systems look to bring care closer to home. There are 11 more medical office projects outside of the Texas Medical Center, adding up to 542K SF under construction.
The surge in the healthcare sector was a tonic for the crisis brought on by the oil market downturn. With the price of oil finally recovering, the two sectors will combine to drive Houston's counter-cyclical growth.
"Houston went through its downturn before the rest of the country," Levy said. "The negative shock is already past, so the area should be in better shape than the broader U.S. economy when the next recession occurs."
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