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Wednesday, February 7, 2018

Houston is Prime Location, but not for Amazon

By Rand Stephens (Houston)

Earlier this month, Amazon released their list of 20 cities for its second headquarters (HQ2) and Houston was not among them. Should we be concerned that the 5th largest company in the U.S. will not be seeking 8 million square feet of Class A office space and providing potentially 50,000 jobs to the Houston area? Or, are we primed for an economic boost despite Amazon’s dismissal?

From business reporters and columnists to commercial real estate heavy hitters and economic development organizations -  they have all been weighing in on why Houston did not make Amazon’s HQ2 short list. Most point to lack of mass transit infrastructure, technology talent, and incentives. Hurricane Harvey did not help our bid either.

Energy, finance and technology are just a few of the strongest driving forces of the U.S. economy. As the energy capital of the world, Houston has always attracted Fortune 500 companies in the oil and gas industry such as Phillips 66, Halliburton and Marathon Oil. In fact, there are 25 Fortune 500 companies headquartered in Houston. Healthcare has also been an emerging economic driver and Houston is home to the largest medical center of the world, the Texas Medical Center (TMC).

The TMC may be Houston’s best kept economic secret despite being home to the world’s largest children’s hospital and the world’s largest cancer hospital. Healthcare is the fastest growing industry and has more potential for growth.  It averages about 10,000 open positions throughout the year. And, we are not talking about just nursing jobs, where there is currently a shortage, but also technical jobs in research and development and education. 

Currently, the TMC has $3 billion in construction projects underway and more to come. By uniting the collective renowned hospitals, public health organizations, universities, medical, dental and pharmacy schools and academic and research institutions, the TMC is poised to transform health, education and research needs of Texas and the world. And, it’s all taking place right here in Houston.

The Houston technology labor market’s primary focus is energy and healthcare, perhaps a labor market that Amazon is not willing to compete with, and that’s okay. Ultimately, Amazon may not have felt at home here, but the outlook for Houston remains positive. If 2017 showed us anything, it’s resilience.

(Rand Stephens is a Principal of Avison Young and Managing Director of the company’s Houston office.)
  

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