The Woodlands Leads Houston-Area Small Cities Office Boom

Small cities in Texas are capitalizing on demand for office space.

A new analysis from CommercialCafé using Yardi Matrix data showed that while the Dallas-area small cities of Plano and Irving led the pack in office space added during the 2010-19 period, Houston’s small cities were not far behind.

CommercialCafé looked at small cities with populations of less than 300,000 people, and only considered office spaces larger than 25K SF. Many of these cities have been booming, especially in the Texas Triangle of Houston, Dallas and the Austin/San Antonio corridor.

In the greater Houston area, The Woodlands ranked first in office space growth, adding more than 4M SF during 2010-19. By the end of 2019, that city had 10.4M SF of rentable office space, an increase of 68% over the 10-year period.

The majority of the 23 properties added in The Woodlands were Class-A buildings — only one was a Class-B asset. Anadarko’s Hackett Tower, which opened in 2014, was the largest project at 550K SF.

Next, the city of Spring took second place, adding 2.7M SF of office space. That resulted in nearly 5.1M SF of rentable office space by the end of 2019, an increase of 117%.

Katy added 1.4M SF of office space during 2010-19, bringing it to 2.6M SF by the end of that period. Though it has less square footage than The Woodlands and Spring, Katy’s office space increased by 124%, more than any other small city in the Houston area.

Finally, Sugar Land added 1.1M SF during the 10-year period, bring total rentable office space to 6.4M SF — an increase of 20%.

The analysis also looked at small city office space scheduled for delivery in the first half of 2020. While The Woodlands added the most by square footage during 2010-19, no office space is under construction for delivery by the end of June.

However, construction is well underway in Spring, which is expecting 180K SF of office space in the first half of this year. Katy should see 78K SF of office space delivered, while 83K SF is slated for delivery in Sugar Land.