Report: E-commerce soars in 2020 — in Houston and beyond

online shopping spree

Retail trends are affecting Houston's real estate growth, a report from Avison Young finds. Photo via Getty Images

This year's holiday shopping season is keeping online retailers hopping. Commercial real estate services provider CBRE predicts holiday e-commerce sales in 2020 will exceed last year's by a whopping 40 percent.

But even before Americans were focusing intently on buying holiday gifts, e-commerce had taken off amid pandemic-generated shopping constraints. In the second quarter of this year, online sales skyrocketed by 44.5 percent compared with the same period in 2019, according to the U.S. Census Bureau. E-commerce accounted for a record-high 15.1 percent of total retail sales from April through June.

A forecast from commercial real estate services provider Avison Young indicates the U.S. upswing in e-commerce sales will benefit one segment of Houston's real estate sector more than any other in 2021 — industrial. Riding this year's e-commerce wave, Houston's industrial market will "remain solid" next year, the forecast says.

"Industrial continues to outperform all other asset types," Avison Young's report reads, "but higher vacancies and larger rent concessions will continue in 2021 as the new supply outpaces immediate demand. Online shopping is strong, and national retailers are building large distribution centers and last-mile facilities throughout the metro."

The forecast cites several industrial projects underway or recently leased in the Houston area:

  • A 1 million-square-foot spec warehouse under construction in Baytown, near the Port of Houston. It's said to be one of the largest spec industrial facilities underway in the U.S. The developer is Hunt Southwest Industrial Real Estate. The warehouse is set to open in March.
  • A 1.5 million-square-foot distribution center under construction in New Caney for home improvement retailer Lowe's. The $65 million project, which will be the largest industrial facility in Montgomery County, is supposed to be ready for occupancy in July.
  • A newly completed 402,648-square-foot facility that online retailer Costway is occupying in Pasadena, near the Port of Houston.
  • Dunavant Distribution's expansion into a 784,000-square-foot leased property in Deer Park, near the Port of Houston.

Various e-commerce players are relying more and more on regional distribution centers, last-mile distribution facilities, and micro-fulfillment centers throughout the Houston area, according to Avison Young. E-commerce behemoth Amazon is driving a lot of this activity. For instance, the retailer is planning a 1 million-square-foot fulfillment center in Missouri City. That space is scheduled to open sometime in 2021. Meanwhile, an 850,000-square-foot Amazon fulfillment center is on tap for nearby Richmond.

In a third-quarter report, Avison Young noted that 15.1 million square feet of industrial space was under construction in the Houston area and 4.1 million square feet of industrial space had been completed, with net absorption of 1.1 million square feet.

The Port of Houston is helping propel many of the moves in Houston's industrial market. In October, the port notched its busiest month on record, with cargo activity sailing 15 percent above the same period in 2019. Operators of the port hope to begin work on widening of the Houston Ship Channel in 2021.

Nationally, this year's spike in online shopping rocked the retail boat. This surge has produced new generations of retailers and consumers, Avison Young says, and has put pressure on the entire supply chain. Furthermore, it has accelerated chatter about the road ahead for last-mile delivery and brick-and-mortar retail.

"Existing retail space, which was either redundant or surplus to requirements, is being repurposed to facilitate 'click and collect' models," per the report. "Retailers are adjusting the 'front end' consumer-facing component of the store for showroom or experiential space to complement traditional browse-and-buy activity. In-store staff, coupled with technology investments, are being channeled into order picking and back-of-house fulfillment activities."

"Traditional stores were always a combination of the retail and logistics functions; recent trends suggest a renewed recognition of this dual role," the firm adds. "As surplus retail space becomes cheaper and more available, innovations around hyperlocal delivery will be a key part of reimagining the future of retail."

This week's innovators to know roundup includes Durg Kumar of Knightsgate Ventures, Rand Stephens of Avison Young, and Shail Sinhasane of Mobisoft. Photos courtesy

3 Houston innovators to know this week

who's who

Editor's note: In today's Monday roundup of Houston innovators, I'm introducing you to three innovators across industries — from commercial real estate to venture capital.

Durg Kumar, managing partner at Knightsgate Ventures

Durg Kumar — along with his New York-based business partner Allen Bryant — join the Houston Innovators Podcast to discuss their second fund. Photos courtesy

As Durg Kumar enters into his venture capital firm's second fund, his focus is not diverted from Knightsgate Ventures' existing portfolio in this unprecedented time. Throughout the pandemic, Houston-based Knightsgate has been offering support to these startups.

"Now's a good time to retrench and focus on building product," Kumar says, "so that in 2021 when travel restrictions ease, then you've got your refined product to go out and take it to the customers."

Kumar and Allen Bryant, the VCs other partner, joined the Houston Innovators Podcast to discuss their second fund and more. Click here to read more and stream the episode.

Rand Stephens, managing director of Avison Young's Houston office

Rand Stephens discusses COVID-19's effect on office and innovation spaces. Durg Kumar (left) and Allen Bryant, partners at Knightsgate Ventures, join the Houston Innovators Podcast to discuss their second fund. Photos courtesy

Since the 1980s, Houston has been increasing focus on diversifying its economy from oil and gas. Rand Stephens has observed this and noted that new innovation centers rising — like The Ion and A&M's new hub in the TMC — are indicators of progress.

"Houston is an incredible diverse city. We have unlimited talent from an engineering standpoint, and I think those types of projects bode well for keeping and attracting top tech talent. I think that's really the key," he says.

He discusses this progress and the effect of the pandemic on CRE in a Q&A. Click here to read more.

Shail Sinhasane, CEO of Mobisoft

This Houston entrepreneur created a new tool can be used to coordinate responsible rides for passengers infected with COVID-19. Photo courtesy

As the pandemic's effects continue to reverberate into aspects of daily life, a Houston software company has pivoted its technology to create an app that can safely transport COVID-19 patients to their quarantine location.

Mobisoft announced the launch of NEMT Pulse, a non-emergency medical transportation app to be used by schools, community health centers, hospitals, and more to easily facilitate isolated rides.

"We pivoted our NEMT software that could be implemented to safely meet the needs of those affected by COVID-19," says Shail Sinhasane, CEO of Mobisoft, in a news release. "This app provides a solution to ensure individuals who have tested positive can get to their quarantine location with one less thing to worry about." Click here to read more.

Rand Stephens, managing director of Avison Young's Houston office, discusses COVID-19's effect on office and innovation spaces. Photo courtesy of Avison Young

Houston real estate expert shares why now's the time for the city's innovation ecosystem to emerge

Q&A

Rand Stephens has been in Houston since the '80s, and he's seen the city evolve from having an economy heavily dominated by oil and gas to a city focused on diversification of industry.

Now, as a technology and innovation ecosystem is emerging with new startup and lab space being developed, Houston is on a good path — even in light of the effects of the pandemic.

"I think that Houston is a very vibrant place and it always has been. It's very entrepreneurial, and it will adjust to the new environment," says Stephens, who's principal at Avison Young and the founding managing director of the company's Houston office.

Stephens discussed the importance of new developments and the effect of the pandemic on the commercial real estate industry in an interview with InnovationMap.

InnovationMap: Why is the timing right for Houston's innovation ecosystem to emerge?

Rand Stephens: Since the '80s, there's been a real emphasis within the city to diversify. Trying to do new things is always difficult because a lot of it has to do with timing — it has to make sense economically. Innovation is a hot thing right now, more so than ever. As a city or company, if you're not constantly innovating, you're going to get left behind.

From a real estate standpoint, we've really had an abundance of low-cost space in an environment that is very entrepreneurial.

IM: Why are emerging innovation campuses like The Ion and Texas A&M Innovation Plaza near the Texas Medical Center so important?

RS: Houston is an incredible diverse city. We have unlimited talent from an engineering standpoint, and I think those types of projects bode well for keeping and attracting top tech talent. I think that's really the key.

You have to have this kind of infrastructure to support the innovation. The more that we can do to make the city walkable and to provide connectivity to the different parts of the city, is important. It's all about the experience. And, I don't think people like getting in the car and fight traffic — I think it's that simple.

IM: Has COVID-19 affected the momentum of innovation development?

RS: It has. But, what I've seen, and it's totally anecdotal, but people are coming to grips with COVID. They are coming to grips with the risks, and, as time goes on, they will see it as a less risky disease as a vaccine and treatment become available.

These innovation spaces are going to be important for collaboration. You lose the spontaneity of innovation and collaboration if you're not around people. But, we're already seeing people in Houston returning to work.

IM: In general, how is the pandemic affecting commercial real estate?

RS: COVID is impacting the office market the most — and I think it will long term as well. There's been a trend for a long time now to use less square footage per person. I think corporations have evolved from looking at their office spaces as a place to put people to work to really trying to create an experiential environment to use the office to re-enforce their culture and brand in order to recruit top talent. COVID has accelerated that trend now.

My gut feeling on that is it's going to depend on the business. Different types of industries function differently, and the size of the business is going to depend on that too. I think the trend of using less square footage per person isn't going to go up. I don't think we're going to see companies taking more space for social distancing. I think what they'll do is give people more flexibility. I think corporates are going to say, "let's ammenitize our space and put people in places where it's experiential and a cool place to work." And I think people are OK with that.

IM: What makes Houston a good city for innovation?

RS: There are three or four reasons off the top of my head, but one is the entrepreneurial spirit and that's pervasive everywhere. Then, we have amazing infrastructure here, with talent and education. Another thing that is key is affordability. Relatively speaking, it's a very affordable city to do business in. The fourth thing would be the diversity and inclusion we have here. Houston is one of the most diverse cities in the country — and a lot of people don't know that. And I have found it to be an incredibly inclusive city. I think if you move here and you have good ideas and work hard, there's nothing to hold you back here.

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This conversation has been edited for brevity and clarity.

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5 incubators and accelerators fueling the growth of Houston startups

meet the finalists

Houston is home to numerous accelerators and incubators that support founders in pushing their innovative startups and technologies forward.

As part of our 2025 Houston Innovation Awards, the new Incubator/Accelerator of the Year category honors a local incubator or accelerator that is championing and fueling the growth of Houston startups.

Five incubators and accelerators have been named finalists for the 2025 award. They support startups ranging from hard-tech companies to digital health startups.

Read more about these organizations below. Then join us at the Houston Innovation Awards on Nov. 13 at Greentown Labs, when the winner will be unveiled.

Get your tickets now on sale for this exclusive event celebrating Houston Innovation.

Activate

Hard tech incubator Activate supports scientists in "the outset of their entrepreneurial journey." The Houston hub was introduced last year, and joins others in Boston, New York, and Berkley, California—where Activate is headquartered. It named its second Houston cohort this summer.

This year, the incubator grew to include its largest number of concurrent supported fellows, with 88 companies currently being supported nationally. In total, Activate has supported 296 fellows who have created 236 companies. Those companies have raised over $4 billion in follow-on funding, according to Activate. In Houston, it has supported several Innovation Awards finalists, including Solidec, Bairitone Health and Deep Anchor Solutions. It is led locally by Houston Managing Director Jeremy Pitts.

EnergyTech Nexus

Cleantech startup hub EnergyTech Nexus' mission is to accelerate the energy transition by connecting founders, investors and industrial stakeholders and helping to develop transformative companies, known as "thunderlizards."

The hub was founded in 2023 by CEO Jason Ethier, Juliana Garaizar and Nada Ahmed. It has supported startups including Capwell Services, Resollant, Syzygy Plasmonics, Hertha Metals, EarthEn Energy and Solidec—many of which are current or past Innovation Awards finalists. This year Energy Tech Nexus launched its COPILOT Accelerator, powered by Wells Fargo Innovation Incubator (IN²) at the National Renewable Energy Laboratory (NREL). COPILOT partners with Browning the Green Space, a nonprofit that promotes diversity, equity and inclusion (DEI) in the clean energy and climatech sectors. Energy Tech Nexus also launched its Liftoff fundraising program, its Investor Program, and a "strategic ecosystem partnership" with Greentown Labs.

Greentown Labs

Climatetech incubator Greentown Labs offers its community resources and a network to climate and energy innovation startups looking to grow. The collaborative community offers members state-of-the-art prototyping labs, business resources and access to investors and corporate partners. The co-located incubator was first launched in Boston in 2011 before opening in Houston in 2021.

Greentown has seen major changes and activity this year. In February, Greentown announced Georgina Campbell Flatter as its new CEO, along with a new Board of Directors. In July, it announced Lawson Gow as its Head of Houston, a "dedicated role to champion the success of Greentown Houston’s startups and lead Greentown’s next chapter of impact in the region," according to Greentown. It has since announced numerous new partnerships, including those with Energy Tech Nexus, Los Angeles-based software development firm Nominal, to launch the new Industrial Center of Excellence; and Houston-based Shoreless, to launch an AI lab onsite. Greentown Houston has supported 175 startups since its launch in 2021, with 45 joining in the last two years. Those startups include the likes of Hertha Metals, RepAir Carbon, Solidec, Eclipse Energy (formerly GoldH2) and many others.

Healthtech Accelerator (TMCi)

The Healthtech Accelerator, formerly TMCx, focuses on clinical partnerships to improve healthcare delivery and outcomes. Emerging digital health and medical device startups that join the accelerator are connected with a network of TMC hospitals and seasoned advisors that will prepare them for clinical validation, funding and deployment.

The Healthtech Accelerator is part of Texas Medical Center Innovation, which also offers the TMCi Accelerator for Cancer Therapeutics. The Healthtech Accelerator named its 19th, and latest, cohort of 11 companies last month.

Impact Hub Houston

Impact Hub Houston supports early-stage ventures at various stages of development through innovative programs that address pressing societal issues. The nonprofit organization supports social impact startups through mentorship, connections and training opportunities.

There are more than 110 Impact Hubs globally with 24,000-plus members spanning 69 countries, making it one of the world’s largest communities for accelerating entrepreneurial solutions toward the United Nations' Sustainable Development Goals (SDGs).

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The Houston Innovation Awards program is sponsored by Houston City College Northwest, Houston Powder Coaters, FLIGHT by Yuengling, and more to be announced soon. For sponsorship opportunities, please contact sales@innovationmap.com.



Rice University launches  engineering-led brain science and health institute

brain research

Rice University has announced the creation of a new interdisciplinary center known as the Rice Brain Institute (RBI).

The new hub will aim to use engineering, natural sciences and social sciences to research the brain and reduce the burden of neurodegenerative, neurodevelopmental and mental health disorders.

“The Rice Brain Institute reflects Rice’s strength in collaboration without boundaries,” Rachel Kimbro, dean of the School of Social Sciences, said in a news release. “Our researchers are not only advancing fundamental science but they’re also ensuring that knowledge reaches society in ways that promote human flourishing.”

RBI researchers will work in thematic clusters focusing on neurodegeneration, mental health, brain injury and neurodevelopment. The clusters will work toward goals such as significantly improving key brain health outcomes, reducing mortality and mental health disorders and improving quality of life for patients living with brain injuries and neurodevelopmental disorders, according to Rice.

The institute will focus on “engineering-driven innovation,” rather than traditional neuroscience, to design tools that can measure, model and modulate brain activity based around Rice’s expertise in soft robotics, neuroimaging, data science and artificial intelligence—making it unique among peer organizations, according to Rice.

Additionally, RBI will be structured around three collaborative Rice “pillars”:

  • The Neuroengineering Initiative, launched in 2018, brings together neuroscience, engineering, and related fields experts
  • The Neuroscience Initiative, a new initiative that brings together cell biologists, neurobiologists, biochemists, chemists and physicists to explore fundamental mechanisms of the brain and nervous system
  • The Brain and Society Initiative, also a new initiative, considers brain research within the broader social and policy landscape

Rice’s Neuroengineering Initiative has already garnered more than $78 million in research funding, according to Rice, and has established major partnerships, like the Rice-Houston Methodist Center for Neural Systems Restoration.

“Rice is uniquely equipped to bridge and connect scientific understanding of the brain and behavior sciences with the technologies and policies that shape our world,” Amy Dittmar, the Howard R. Hughes Provost and executive vice president for academic affairs, added in the news release. “By uniting faculty in neuroengineering, neuroscience and psychological sciences, this interdisciplinary hub embodies the kind of bold, nimble collaboration that allows Rice to turn discovery into societal impact to save lives and enhance human flourishing.”

The formation of the RBI coincides with recent support of the Dementia Prevention Research Institute of Texas (DPRIT), which landed voter approval earlier this week and aims to make Texas the center for dementia research via brain-health tech. According to the World Economic Forum, brain disorders and mental health disorders cost the global economy an estimated $5 trillion per year and could be as high as $16 trillion by 2030.

“Few areas of research have as direct and profound an impact on human well-being as brain health,” Rice President Reginald DesRoches added in the news release. “As rates of Alzheimer’s, dementia and other neurological diseases rise in our country and around the world, universities have a responsibility to lead the discovery of solutions that preserve memory, movement and quality of life. We all know someone who has been affected by a brain-related health issue, so this research is personal to all of us.”

Texas voters OK $3 billion for new dementia research institute

state funding

Texas voters on Nov. 4 overwhelmingly approved a ballot measure that provides $3 billion in state funding over a 10-year span for the newly established Dementia Prevention and Research Institute of Texas (DPRIT).

Thanks to the passage of Proposition 14, Texas now boasts the country’s largest state-funded initiative dedicated to dementia research and prevention, according to the Alzheimer’s Association. Up to $300 million in grants will be awarded during the 10-year funding period.

“This is a transformative moment for Texas and for the fight against Alzheimer’s and all other dementia,” said Joanne Pike, president and CEO of the Alzheimer’s Association. “Texans have chosen to invest in hope, innovation, and solutions for the millions of families affected by these devastating diseases. With the passage of Proposition 14, Texas is now poised to lead the nation in dementia research and prevention.”

The association says DPRIT will drive scientific breakthroughs, attract top-notch dementia researchers to Texas, and generate thousands of jobs statewide.

An estimated 460,000 Texans are living with dementia, the association says, and more than one million caregivers support them.

DPRIT is modeled after the Cancer Prevention and Research Institute of Texas (CPRIT). Since 2008, the state agency has awarded nearly $4 billion in grants to research organizations for cancer-related academic research, prevention programs, and product development.

An analysis by the McKinsey Health Institute found that investing in brain health initiatives like DPRIT could boost Texas’ GDP by $260 billion. Much of that GDP bump could benefit the Houston area, which is home to dementia-focused organizations such as UTHealth Houston Neurosciences, Baylor College of Medicine’s Center for Alzheimer’s and Neurodegenerative Diseases, the University of Texas Medical Branch at Galveston’s Collaborative Alzheimer’s Disease and Memory Disorders Program, and the Houston Methodist Research Institute’s John M. O’Quinn Foundation Neurodegenerative Disorders Laboratory.

The Greater Houston Partnership says DPRIT holds the potential “to elevate Texas — particularly Houston — as a hub for brain health research.”

State Sen. Joan Huffman, a Houston Republican, is one of DPRIT’s champions. She sponsored legislation this year to create the institute and ask Texas voters to approve the $3 billion in funding.

“By establishing the Dementia Prevention and Research Institute of Texas, we are positioning our state to lead the charge against one of the most devastating health challenges of our time,” Huffman said in May. “With $3 billion in funding over the next decade, we will drive critical research, develop new strategies for prevention and treatment, and support our health care community.”

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