Space race

Houston trails behind Dallas when it comes to coworking office growth

When it comes to coworking space growth, Dallas has the edge on both Houston and Austin. Getty Images

Houston's coworking space growth pales in comparison to that of Dallas, a new study finds.

A survey by commercial real estate company Colliers International finds that among 19 major markets in the U.S., DFW is No. 1 for coworking growth while Houston is No. 15.

In DFW, the amount of coworking space in downtown markets and core submarkets soared 250 percent from the fourth quarter of 2016 to mid-2018, winding up at nearly 370,000 square feet (roughly equivalent to the size of two Walmart supercenters). That figure excludes suburban markets. DFW's coworking expansion dwarfs that of Houston, which ranks 15th (27 percent increase, landing at just over 706,000 square feet), and even Austin's, which ranks 14th in the Colliers survey (30 percent increase, landing at almost 300,000 square feet in mid-2018).

While Houston might not have had much recorded growth over the past 2.5 years, the city expects to see some major projects deliver during the next 2.5 years. The Cannon's 120,000-square-foot space is expected to open in May of this year, while Rice University's The Ion that will be 270,000 square feet in Midtown will finish up at then end of 2020.

Stephen Newbold, national director of office research at Colliers, says tech companies are the dominant tenants in coworking spaces, which helps explain why coworking represented 3.4 percent of all office inventory in the tech-heavy Austin market in mid-2018, compared with 0.9 percent in DFW and 0.6 percent in Houston. Austin's coworking share also outpaced that of Seattle (2.6 percent) and San Francisco (2.3 percent).

Newbold points out that DFW's and Houston's shares of coworking space are lower than Austin's because they rely more on a traditional base of tenants consisting of financial services firms, professional firms, and major corporations.

Colliers notes that coworking made up just 1.6 percent of all office space in the U.S. in mid-2018, or 27.2 million square feet. However, JLL says coworking represented nearly two-thirds of the occupancy gains in the U.S. office market in 2018, and it predicts coworking will constitute about one-third of the office market by 2030.

"Our research, and our conversations with corporate executives across the globe, indicate that flexible work is not just a passing trend — it's woven into the fabric of the future of work," Scott Homa, senior vice president and director of U.S. office research at JLL, says in a release. "Even though some markets are better positioned for rapid growth, this still leaves significant runway for expansion across all U.S. office markets."

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This story originally ran on CultureMap.

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Building Houston

 
 

5G could be taking over Texas — and Houston is leading the way. Photo via Getty Images

Based on one key measure, Houston sits at the forefront of a telecom revolution that could spark a regional economic impact of more than $30 billion.

Data published recently by the Texas Comptroller's Office points out that as of last November and December, Houston led all cities in Texas for the number of so-called "small cells." Small cells are a key component in the rollout of ultra-high-speed 5G wireless communication throughout the Houston area and the country.

As the Texas Comptroller's Office explains, small cells are low-powered antennas that communicate wirelessly via radio waves. They're usually installed on existing public infrastructure like street signs or utility poles, instead of the big communication towers that transmit 4G signals.

The comptroller's tally shows Houston had approved 5,455 small-cell sites as of the November-December timeframe. That dwarfs the total number of sites (1,948) for the state's second-ranked city, Dallas.

"Houston is in the vanguard of small cell permitting in Texas, and not just because it's the state's largest city; advocates have lauded its proactive approach to 5G. Other cities, particularly smaller ones, are lagging well behind," the Comptroller's Office notes.

According to CTIA, a trade group for the wireless communications industry, 5G holds the promise to deliver an economic impact of $30.3 billion in the Houston area and create 93,700 jobs. The group says industries such as health care, energy, transportation, e-commerce, and logistics stand to benefit from the emergence of 5G.

"Maintaining world-class communications infrastructure is a requirement for success in a rapidly changing global economy. Small cells and fiber technology are the key foundational components for network densification and robust 5G. Cities like Houston that have embraced the need for this infrastructure will see the benefits of 5G faster than others," Mandy Derr, government affairs director at Houston-based communications infrastructure REIT Crown Castle International Corp. and a member of the Texas 5G Alliance, tells InnovationMap.

Derr says leaders in Houston have embraced the importance of small-cell technology through "reasonable and effective" regulations and processes aimed at boosting 5G capabilities. Three major providers of wireless service — AT&T, T-Mobile, and Verizon — offer 5G to customers in the Houston area.

"More small cells and fiber provide greater and faster access for the masses, enabling the connectivity that is essential to our businesses today — whether it's accepting payments on a mobile card reader, completing a sale on the go, or reliably reaching consumers where they are," Derr says.

In a blog post, Netrality Data Centers, which operates a data center in Houston, proclaims that Houston is shaping up to be a hub of 5G innovation.

"Houston has always been on the frontline," Mayor Sylvester Turner said during a 5G roundtable discussion in 2019. "It is who we are. It is in our DNA. We are a leading city. We didn't wait for somebody else to go to the moon. Or to be the energy capital of the world. Or the largest medical center in the world. But you don't stay at the front if you don't continue to lead."

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