The volatile price of crude oil on the international market over the last decade has spurred investment in the domestic production of oil and gas. A push for more affordable fuel prices has created new opportunities for energy firms, which, in turn, is generating growth in the commercial real estate markets in several major cities.
A recent report by Jones Lang LaSalle found that cities such as Denver, Dallas, Philadelphia and Houston are expected to benefit from millions of new energy jobs over the next few years. It’s estimated that 3.5 million new positions will be created within the industry by 2035, with 75 percent of them being in major cities with established ties to the sector.
“The rapid growth in domestic oil and gas production has made a large but uneven impact on the U.S. economy,” Bruce Rutherford, LaSalle’s international director and energy practice leader, told the Denver Business Journal. “In the top energy cities, commercial real estate markets are booming, with growth creating scarcity — and thus a landlord-favorable market. This applies not only to offices, but also to retail, hotel, multifamily, industrial and distribution facilities and sites.”
The boom of the energy sector will raise demand for offices around the country. The Denver Business Journal noted that 22 percent of office space leased nationwide was rented by energy industry companies. Building and property managers could reduce vacancy rates if they are able to increase their appeal to these specialized firms. Data management tools can help commercial property owners understand their target audience. Tracking information on preferences, marketing results and industry trends could increase properties attractiveness to energy firms. A more focused marketing campaign could boost the return on investment.
The same strategy would work with other sectors as well. Growth in the energy field could spur additional economic development for the rest of the economy. The Department of Labor recently reported that 175,000 jobs were created in May. Companies experiencing significant expansion could be seeking new offices, making it an ideal time to have a targeted marketing campaign ready, as most of the country has seen an improvement in unemployment over the last year.