Energy Spurs Recovery in Houston

Excerpt from an article in The New York Times
Wednesday, February 08, 2012

Energy Spurs a Recovery in Houston Real Estate 

By KRISTINA SHEVORY

HOUSTON — In most cities, companies are holding tight, mothballing office expansions and delaying new hires. But not in Houston.

Powered by a rise in oil prices and a shale exploration boom, Houston is the first major metropolitan region to regain all the jobs it lost in the recession. The region added about 76,000 jobs last year, according to the Texas Workforce Commission, and is on pace to pick up tens of thousands more this year.

Oil and gas companies, from the biggest names like Exxon Mobil to the smallest independents, are dusting off plans to expand, relocate or put up new buildings. Last year, 1.8 million square feet of commercial space was vacuumed up, and real estate brokers expect the same or greater this year. “No question, it’s energy,” said Jim Arket, a senior vice president at Grubb & Ellis in Houston. “That’s been the plus multiplier of Houston.”

The resurgence can be partly tied to the lifting in fall 2010 of the government moratorium on deepwater drilling in the Gulf of Mexico after the BP oil spill. The bulk of the gulf’s drilling and profits comes from those offshore waters. Shale drilling has also bolstered balance sheets.

Nexen, a Canadian company, is moving its American headquarters from Plano, Tex., to Houston after it received permits to restart deepwater drilling in the gulf. “Houston is quite clearly the place to be for a deepwater operator,” said Grant Dreger, the vice president for finance and administration at Nexen Petroleum U.S.A. “You have loads of deepwater talent, and it’s home to the majority of our joint venture partners.”