Post-Harvey: Finding the New Normal
Hurricane Harvey made landfall in Texas almost six weeks ago, dropping over a year’s worth of rain on Houston in a matter of days. Ever since, much of the Houston area is attempting to return to normalcy after the devastation from the flooding of Hurricane Harvey. As we begin to understand the long-term impacts, it is clear Houston will never be the same.
Houston is one of the most important markets in America’s supply chain. That means the impact of Harvey will not only be felt locally, but nationally as well. The largest U.S. port in foreign tonnage and home to the nation’s largest petrochemical complex, the Port of Houston triggered significant shortages and delays when it closed for nearly five days after the hurricane. Over the next several months, CBRE predicts consumers across the nation will see an increase in gas prices of about $0.08 to $0.10. Thankfully, the majority of Houston’s industrial market suffered little structural damage. Several national building supply companies have already secured additional space for the estimated $100B+ rebuilding effort over the next year.
Amazingly, CBRE Research estimates that less than 40 of Houston’s 1,200-building inventory suffered damage. Houston has recently been defined by an excess of sublease space, which is expected to quickly change with short-term leases filling up empty spaces. In addition to this, some direct tenants have removed their sublease availabilities from the market. Companies needing to move offices might have to rethink their move-out, as office build-outs of future spaces face construction delays caused by a shortage of materials and workers.