Houston trails behind Dallas when it comes to coworking office growth

Space race

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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Report: Houston's VC trends so far in 2024 and what to watch for the rest of the year

by the numbers

Houston-based geothermal company Fervo Energy accounted for more than half of the venture capital raised by Houston-area startups in the first quarter of 2024.

The region’s VC haul in the first quarter totaled $462.4 million, according to the PitchBook-NCVA Venture Monitor. That’s up from $290.4 million during the same period in 2023 and from $285.8 million in the fourth quarter of last year. Click here to see the Q1 rounds as reported by InnovationMap.

Fervo’s latest funding round, announced in February, represented $244 million (52 percent) of the region’s VC total for the first quarter of 2024.

A report released in March by PitchBook indicated that VC funding last year for geothermal power reached $431 million across 21 deals. As of late February 25 — four days ahead of the Fervo announcement — $165.5 million in VC funding had been pumped into the geothermal sector this year, according to PitchBook.

“The recent VC deal activity with the geothermal power sector underscores a vibrant and evolving market, but still one that garners far less VC than other renewables,” says the report.

In all, Houston-area startups made 38 VC deals in this year’s first quarter, the PitchBook-NVCA Venture Monitor says. That’s down from 42 in the fourth quarter of 2023 and 43 in the first quarter of 2023. Nationwide, the deal count fell sharply in the first quarter of 2024 vs. the first and fourth quarters of last year.

The PitchBook-NVCA Venture Monitor report shows that nationwide, the $36.6 billion in VC investments recorded during the first quarter of 2024 “remained relatively on pace with the past year.”

“However, it would be a mistake to hyperfocus on the results of a single quarter whose results were a bit farther left on the bell curve than usual. The venture capital … business cycle effectively reset in recent years, and as of early 2024, it still appears to be searching for its level,” says the report.

“It is too early to tell where 2024 is going, but the game is on, and America’s VCs are ready for it,” the report adds. “In 2022, our world changed; in 2023, we accepted it was not changing back; and in 2024, we are building what is next.”

In a bit of good news for the Houston area, the report cites cleantech/energy as one of two sectors that venture capitalists should not overlook. The other sector: cybersecurity.

But in a bit of not-so-good news for the region, the report notes a slowdown in VC deals in the healthcare sector over the past two years in the wake of “pandemic-fueled capital exuberance.”

“Yet the healthcare sector differentiates itself from the rest of the market by demonstrating many unmet needs that could have a profound impact on society, particularly around disease diagnosis and treatment,” the report goes on to say. “On top of the immense opportunity set for disruption within healthcare, investor enthusiasm around AI adoption in drug development further speaks to the demand for better solutions in biotech through groundbreaking innovations.”

Rice, UH name student startup cohorts to annual summer accelerator

ready to grow

For the 11th year, Rice University and the University of Houston have teamed up to present their summer student accelerator programs.

UH's RED Labs and Rice's OwlSpark will be hosted at the Ion over 11 weeks of programming, networking, and training as each of the 18 participating companies are introduced to Houston's innovation ecosystem.

“The collaboration the University of Houston has with Rice University gives founders in RED Labs and OwlSpark a unique opportunity to grow along their peers in the larger Houston community and really exemplifies the spirit of collaboration that the Houston business ecosystem is known for,” Managing Director of RED Labs Liana Gonzalez-Schulenberg says in a news release. “It never fails to surprise me at the end of the summer the relationships built, the support systems created and collaborations produced across our universities. By working together, we empower the next generation of entrepreneurs to work together as they turn their visions into reality and drive positive change in the community.”

The programs conclude with the Bayou Startup Showcase on August 1, an event that's open to the public. Those interested can sign up online for more information.

“We’re celebrating more than just an 11-year partnership; we’re recognizing a dynamic alliance that has been instrumental in fostering entrepreneurship and propelling Houston to the forefront of innovation,” Managing Director of OwlSpark Jessica Fleenor adds. “This partnership exemplifies our dedication to cultivating a thriving environment where entrepreneurs can connect, grow and succeed surrounded by unparalleled resources and support. We are incredibly excited to see these new ventures grow as they join our growing network and are thrilled to host our cohorts at the Ion, positioning us at the core of our city’s vibrant innovation landscape.”

Here are the companies selected for each of the two programs, as outlined in the news release:

University of Houston RED Labs Class 12

Root Planters develops smart indoor plant care devices designed to prevent plant death by providing automatic watering, tailored for busy individuals and gardeners looking to maintain plant health with minimal effort.
Burb Groceries is an online grocery retailer for people with chronic health conditions.
That Dude’s Bakehouse offers premium, half-pound cookies, combining choice ingredients and craftsmanship with the mission of being the best part of somebody’s day
Mulligan Bandit aims to redefine golf fashion, offering affordable yet high-quality clothing that seamlessly transitions from the fairway to the streets, reflecting personal style while ensuring durability and comfort.
Surreal Vision offers immersive mixed reality solutions that provide dynamic visualization experiences to enhance design collaboration and client presentations.
Agave Catering is a catering company focused on providing high-quality, gourmet boxed lunches for professionals on the go.
Digitally Marie is a purposeful creative agency dedicated to reducing the opportunity gap for female entrepreneurs. Through our heart-driven approach, we elevate content production embodying their brand perception with unapologetic authenticity.
Unison is a personal contact relationship management tool that alleviates the risk of data loss and helps to build more meaningful professional and personal relationships.
Brain-eNet is a platform that provides hardware and software tools to enable the development of brain-controlled Internet of Things applications.
Pasha Blend Collection specializes in creating modern skincare products that embodies purity, authenticity and inclusivity.
Arresting Motion is a brand strategy design consultancy and marketing agency that transforms Houston’s top real estate firms into the brands they deserve.
CalliDanna is a consulting company that coaches girls 12 to 18 to help improve their lives professionally and personally.

Rice University OwlSpark Class 12

EcoFleet Solutions offers rechargeable electric power units for semitrucks, powering air conditioning and cabin functions during stops without engine idling, cutting fuel costs, maintenance and emissions.
Houston Community Print Shop offers printmaking classes and equipment access, focusing on community building and supporting underserved areas.
KOQ Agency curates and organizes global tours and live entertainment opportunities for queer and ally artists in drag, music and entertainment.
Euvivo Diagnostics is developing a direct-to-consumer test that analyzes cell aging by examining mitochondrial performance and new aging markers, tailored for individuals with mitochondrial disorders.
Hair Hub provides a compilation of styling tutorials, educational content, planning tools and a comprehensive database of products tailored for Black hair to provide resources for users to perform cost-efficient DIY haircare.
xMAD.ai is a compression-as-a-service platform that democratizes access to LLMs (Large Language Models) by making them faster, more private, cost-effective and accessible to businesses of all sizes.

Houston dazzles as most diverse large city in U.S., report says

we're No. 1

Living in a multicultural city comes with many benefits. Diverse communities bring new perspectives, greater versatility, and economic boosts, to name a few. And according to a new study by WalletHub, Houston is among the most diverse places in the nation.

Houston is getting some time in the spotlight in WalletHub's annual ranking of the "Most Diverse Cities in the U.S. (2024)," maintaining its position as the No. 1 most diverse large city in America, and the No. 4 overall most diverse. The report compared 501 U.S. cities across 13 metrics in five categories that encompass "diversity" across socioeconomic, cultural, economic, household, and religious factors.

Space City earned 72.37 out of a total 100 possible points, following behind Gaithersburg, Maryland (No. 1), Silver Spring, Maryland (No. 2), and Germantown, Maryland (No. 3). Arlington, Texas rounded out the top five. Houston is still holding strong as the most diverse large U.S. city after first taking the crown in WalletHub's 2021 report.

The city performed the best in two overall major categories for socioeconomic and cultural diversity, earning a respective rank of No. 27 and No. 31 out of all 501 cities in the study. Houston's religious diversity earned it No. 54, while it fell behind when it came to household and economic diversity, earning No. 112 and No. 156.

More specifically, Houston performed the best in the rankings for its linguistic diversity (No. 25), industry diversity (No. 28), and educational-attainment diversity (No. 29). But the city fell the farthest behind in the rankings for age diversity (No. 310) and worker-class diversity (No. 340).

Here's how Houston performed within the study's remaining categories out of all 501 cities:

45th – Racial and ethnic diversity
119th – Household-type diversity
179th – Household-size diversity
206th – Occupational diversity
226th – Income diversity
246th – Marital-status diversity
249th – Birthplace diversity

"The most diverse cities demonstrate diversity in many dimensions – not just in race and gender but also everything from residents’ languages and birthplaces to their job types and household sizes," said WalletHub analyst Cassandra Happe in the report. "These cities blend together a multitude of different perspectives, helping people to better understand the world around them and become more empathetic. This exchange of ideas also tends to increase the economic success of diverse cities."

Besides Houston and Arlington, the only other Texas city to earn a place among the top 10 most diverse cities in the U.S. was Dallas, which ranked No. 8.

Other Texas cities that earned spots in the report include Fort Worth (No. 22), Austin (No. 70), Plano (No. 83), San Antonio (No. 87), Corpus Christi (No. 125), El Paso (No. 253), and Laredo (No. 468).

The full report can be found on wallethub.com.