As prolonged oil pricing fluctuations take their toll, energy companies are reassessing their space needs.
Turbulence in the oil and gas industry is hitting the real estate sector,
forcing some energy companies to make difficult decisions about their space needs.
Of course, not all energy markets are considered equal.
As oil prices continue to drop across North America, energy-centric markets in the United States and Canada are responding in various ways. Those with more diversified economies are relatively protected from the effects of the oil slump, while markets with a high volume of energy tenants are navigating subleases and tremendous amounts of excess space.
JLL’s 2015 Energy Outlook examines these current trends across six key North American markets. By analyzing each locale separately, we can see how market saturation plays a role in each, and make portfolio recommendations based on their unique energy climates.
Calgary has been hit hard by the oil and gas downturn. This is largely due to market saturation by energy-industry tenants, which make up 75 percent of downtown office inventory. As a result of the slump, Class A office rental rates are down 41.7 percent year to date. Get the Calgary report.
While oil and gas has historically been a primary driver of the Dallas-Fort Worth economy, growth in other industries over the past several years has helped DFW survive—and even thrive—throughout the energy slump. There are, however, regional variances. Get the DFW report.
Reductions in the number of operational rigs across Colorado have deeply affected Denver’s energy sector—which occupies one-third of all CBD space—forcing many energy tenants to pursue subletting of their space to save on real estate costs. Get the Denver report.
Edmonton’s energy sector has seen major instability over the past year as worldwide oil prices declined. With a soft market expected to continue, many companies remain cautious on future real estate decisions. Get the Edmonton report.
Houston’s energy sector has been hit hard by major job cuts within the energy sector following the drop in worldwide oil prices. However, the long-term future of the industry should be secure with the strength of an ethane advantage. Get the Houston report.
Oil and gas companies in Pittsburgh are under tremendous pressure to consolidate space within the city's greater industrial real estate market. Despite the downturn, Pittsburgh is likely to remain an energy hub long-term. Get the Pittsburgh report.
Download this report to learn more on how fluctuating oil and gas prices may affect your real estate portfolio, and how you can stay strategic during these uncertain times.
Research Director+1 713 425 5903
Research Manager, Canada+1 416 304 6047
International Director, Energy Group+1 713 888 4071
Senior Vice President, Energy Group+1 303 390 5215