Impact Of Oil Price Splits Houston Into East vs. West
Houston's industrial market and the price of oil have created a distinct delineation between markets. Highway 59 acts as a boundary between the downstream haves and upstream have-nots. According to JLL research, Houston's west side is experiencing 20% office vacancy and 8% industrial vacancy, compared to the east side's 5% vacancy. There's 700k SF of industrial sublease space on the market in west Houston. On the other side of town, $50B in new projects are scheduled for delivery by 2020, and commercial property prices are up 25% over two years.
The impact has been felt in the jobs market as well. In West Houston, 10,000 white collar jobs have been lost. With manufacturing booming, east Houston has gained 10,000 blue collar jobs. Once oil starts to recover, we may see a reversion. Houston can expect a swing back to the west side, where popular lifestyle amenities and significant inventory exist.
