By Nora Caley
From the May / June 2023 Issue
As the economy and consumer behaviors change, so does demand for office, retail, and multifamily properties. Commercial real estate experts say although these sectors are experiencing some challenges, the outlook is still positive. Meanwhile economic development leaders point to specific properties and developments that make their locations perfect for business.
According to the 2023 Commercial Real Estate Trends report from J.P. Morgan, office and retail have some challenges, and multifamily and industrial are performing well. Employers are struggling to get employees to return to their workplaces, which is causing a glut of office space. Retail stores are still facing competition from online shopping, a phenomenon that is creating demand for industrial warehouse and distribution space.
Similar findings come from Moody’s Analytics, which in its Commercial Real Estate Outlook noted that the national vacancy rate for office properties rose in the final three months of 2022, ending the year at 18.7%. That’s a higher vacancy rate than the pandemic high of 18.5% in the second quarter of 2022. The report, citing Kastle data, noted that as of the week of January 11, offices in 10 large cities showed average physical occupancy rates of 46.9%, which was similar to 2021 and 2022 rates.
Certain locations have some excellent property available for expanding and relocating companies. Here are some locations that are heralding their commercial properties and land availability.
CONROE, TEXAS: CITY WITH LAND TO GROW
Located 40 miles north of Houston, TX along I-45, Conroe is one of the fastest-growing cities in the United States. It was recently identified as the Number 1 “boomtown” in Texas and third in the nation by financial technology company SmartAsset. Conroe has seen its population swell by 26% to nearly 100,000 over the past five years, a remarkable surge, even for Texas.
“Conroe is in the path of growth from Houston,” says Mayor Jody Czajkoski. “This community will be the northern anchor of what will be the Houston-Conroe Metroplex. Conroe is the only city left that has land to grow.”
With abundant and affordable housing and safe streets, Conroe is a family-friendly city with a burgeoning music and restaurant scene. And with 157 miles of shoreline, majestic Lake Conroe juts into Sam Houston National Forest, a natural buffer to the north.
Talent is readily available with an expanding workforce of nearly two million potential employees within a 40-mile radius. Conroe’s dynamic and diversifying economy is attracting robust investments in advanced manufacturing, energy services, logistics, retail and, increasingly, top-flight industries such as healthcare and biotechnology.
For manufacturers, Conroe boasts easy Interstate access and proximity to bustling Port Houston. For executives, Conroe-North Houston Regional Airport offers its own customs facility, a rare asset that smooths out the wrinkles of international business travel.
“You can have your corporate headquarters in The Woodlands, your manufacturing plant here in Conroe, and park your corporate aircraft at our airport.”
— Danielle Scheiner, Executive Director, Conroe Economic Development Council
Targeted investments in infrastructure that helped to produce an enviable public school system also yielded two premium industrial parks, one of which has an on-site community college. Totaling nearly 2,000 acres, Conroe Park North and the newer Deison Technology Park are crucial pillars of the city’s economic development strategy.
“We’ve got all the infrastructure in place,” says Conroe Economic Development Council Executive Director Danielle Scheiner. “We’ve got our industrial parks and the airport. We have a strong manufacturing base that partners well with the corporate base in The Woodlands, our neighbor to the south. You can have your corporate headquarters in The Woodlands, your manufacturing plant here in Conroe, and park your corporate aircraft at our airport.”
Ver-Mac, a leader in the traffic safety industry, discovered its ideal home in Conroe. The Quebec City, Canada-based company moved its United States operations from Houston to Conroe in December 2021, purchasing a 71,000-square-foot manufacturing facility in Conroe Park North.
“When we went to see the shop in Conroe, we knew it was a fit right away,” said Adam Chelo, Director of Ver-Mac’s Conroe operations. “We said, ‘This place is awesome.’ The choice was made before we even left the parking lot.”
Chelo praised the capable workforce in the Conroe area and the ability to operate in an ecosystem that promotes collaboration. “The location is prime for us, and we found that the workforce we’re getting in Conroe are qualified individuals,” Chelo said. “There’s also the benefit of access to suppliers. Instead of having to wait hours for somebody to drop off parts, a lot of the time we know a company who is right around the corner.”
Visit ConroeEDC.org for more information.
