The last time oil prices hit $100 a barrel nearly a decade ago, Houston’s commercial real estate market flourished.
Real estate investors poured money into Houston. Developers raced to build new office space. Oil and gas companies, flush with cash from the fracking boom, planned lavish new campuses and snapped up long-term office leases, often taking on more space than needed as they looked confidently to future growth.
This time around, $100-a-barrel oil is not stoking the same fervent optimism.
Even with oil prices expected to climb higher, energy companies — burned by two wrenching oil busts in five years — aren’t clamoring for more real estate. Under pressure from Wall Street to control costs, they’ve figured out how to do more with less – including fewer employees and fewer desks — while incorporating remote and flexible working arrangements that became popular with employees during the pandemic.
Throughout the pandemic, many oil and gas companies delayed leasing decisions, opted out of big expansions or consolidated real estate holdings. It’s too soon to say if high oil prices will change that behavior, experts say, but no one is expecting a repeat of the shale-induced real estate boom of a decade ago. Click to read more at www.houstonchronicle.com.