Cypressbrook President Mike Novelli: Oil Prices Aren’t a Problem Yet
Leasing and sales activity hit pause in November as everyone in Houston stopped to watch the WTI, the benchmark for American crude oil prices, drop. But Cypressbrook president Mike Novelli says deals are still happening, and we’ve got room for a slowdown. The West Texas Intermediate hit its five-year low Wednesday, but he still closed two construction deals yesterday, a warehouse in Houston and a multifamily development in Central Texas. Both will be moving dirt in 30 days, proof that companies are seeing through their commitments and aren’t panicking. They're just getting a little more cautious and thoughtful, Mike tells us. And there’s nothing wrong with that—Houston’s been amazingly hot lately, and maybe it was time to take a breath and reflect.
University of Houston Institute for Regional Forecasting director Bill Gilmer agrees. At a recent presentation for the graduate real estate program, he said that oil prices in the $60 to $80/barrel range should create about 70,000 jobs a year. That’s healthy growth. Of course, as Mike says, “nobody knows who’s skinny dipping until the tide goes out”; we’ll have to wait and see if energy companies stop drilling or hiring. In the meantime, Cypressbrook is enjoying one of its strongest years, closing more than 100 office and industrial transactions and watching rents rise.
