America’s de facto energy capital, Houston, Texas, is feeling the love of the current petroleum energy boom and expanding shale industry.
The sprawling city of 2.1 million residents has for the second consecutive year led the nation in the number of corporate expansion projects, according to a survey by Site Selection corporate real estate magazine in its March edition.
In 2012, the Houston-Sugar Land-Baytown metropolitan area, the nation’s fifth largest with a total population, including suburbs, of 6 million, had 325 corporate development projects; 20 of these were valued at more than $100 million apiece.
Also ranking high on the list of metro areas with major corporate expansions or investments: Chicago-Napier-Joliet with 311 projects, Dallas-Ft. Worth-Arlington with 224 projects, Atlanta-Sandy Springs-Marietta with 165 projects and Detroit-Warren-Livonia with 144 projects. But Houston is by far the leader, benefitting from the current boom in oil and natural gas production.
The largest project in the Houston annouced last year was a $5 billion project by Chevron Phillips Chemical Co. to build a 1.5 million metric-ton ethane cracker at the company's Cedar Bayou facility in Baytown and two polyethylene units near Sweeny, about 65 miles south of downtown Houston. The project is expected to be completed in 2017. The company is a 50-50 joint venture between San Ramon, Calif.-based Chevron Corporation (NYSE:CVX) and Houston’s ConocoPhillips (NYSE:COP). The second-largest project is the expansion of a $1.7 billion ethylene cracker facility in Oyster Creek, about 63 miles south of the city near the Gulf Coast, by the Dow Chemical Company (NYSE:DOW). In all, about $60 billion in energy-related projects have been announced, planned or are in the works in the area, according to Greater Houston Partnership.
Nonenergy-related projects include a new medical supplies distribution center by Illinois-based Medline Industries, Inc., in Katy, Texas, and a bottled water facility in Missouri City, Texas, by Niagara Bottling LLC. Sugar Land, Texas, has seen recent major investments by Dallas-based Texas Instruments Incorporated (Nasdaq:TXN) and UnitedHealth Group Inc. (NYSE:UNH) of Minnetonka, Minn.
With all these projects going on, it’s no surprise the Houston area is also seeing homes being snatched up. The Houston Association of Realtors said that January, the most recent figure, had the lowest home inventory since December 1999. The start of the year is typically a slow period for homebuying, but, according to the association, home sales in Houston increased year-over-year by 29 percent.
“This market is in an unbelievable frenzy. I’ve never seen a market like this,” local realtor Amy Bernstein told the Houston Chronicle. “The majority of homes that come on the market today and are priced right -- or even priced a little high -- are getting multiple offers on the first day.”