Houston Republic

American commercial real estate services and investment firm CBRE Group Inc. recently ranked Houston eighth overall in a report identifying development markets favorable for commercial construction as the country recovers from the economic impacts of the COVID-19 pandemic.

CBRE’s inaugural U.S. Development Opportunity Index report analyzes the top 50 U.S. markets by population, then ranks those markets on four different performance categories: construction costs, strength of existing supply, prior cycle performance and forecast property performance.

Houston’s economy has been impacted by uncertain oil prices, but the region’s construction market remains resilient. It is a top 10 market for development opportunity by merit of its forecast growth in retail spending and growth in the manufacturing and office-using professional services sector.

“People and businesses continue to move to Houston, driving construction and development for all of the lines of business: industrial, office including healthcare, retail and multifamily,” Robert Del’Ve, managing director with CBRE in Houston, said. “Most notably, Houston has an undeniable track record of resiliency. In the past decade, Houston endured the effects of two economic downturns – the Great Recession and the Fracking Bust – as well as Hurricanes Ike and Harvey. Despite this, the region demonstrated remarkable growth over that period, gaining 1.1 million residents, creating nearly 600,000 jobs and adding $140 billion to its gross market product.”

Houston's eighth overall spot on the inaugural list included sector rankings of first for retail development opportunities, sixth for industrial, 13th for multifamily and 24th for office.

Houston’s No. 1 ranking in the retail construction was driven by its high score in total retail spending and forecasted spending increase from 2020-2023. The city’s industrial and logistics development score was from the city’s population change from 2012-2019 and forecast population growth from 2020-2023. Multifamily and office construction both had relatively strong total employment, but ranked lower for employment growth and projected employment change.

Visitors can find the full report here.