The problem we face is that many of the buildings currently available in the market place are not sufficient to accommodate the growing needs of the oil business.  The vast majority of these buildings lack sufficient crane capacity, hook height and lay down yard to accommodate the needs of these users. During the last five to ten years many of the citys inner-loop manufacturing areas have been redeveloped into residential and retail projects. Many crane served facilities along Washington Avenue or the citys east side have been replaced with townhomes, service centers and shopping centers. 

Investors have been quick to break ground on new crane served or crane ready buildings.  However, many of these new projects are just under construction or proposed and are several months from completion.  Also, these speculative buildings are a flexible design that doubles both as warehouse and crane served space; it is too risky for them to produce a facility in the size needed by larger tenants.  A dedicated oil field service company requires wider bays, higher capacity cranes, up to 20-30 tons, high hook height and adjoining lay down yard space. So the new buildings that have been announced, will not address the needs of these larger users. 

The increasing price of urban land is one of the primary reasons for this scarcity of industrial manufacturing properties. Higher land values have resulted in the demolition of many facilities inside beltway 8 and near east side of the city. The demand for these facilities went soft in the mid-1980`s and now that demand is strong again many of the traditional manufacturing areas are in transition. Higher land prices will result in smaller facilities and move new facilities to areas further away from the traditional manufacturing base. 

Houston is a major center for the fabrication of oil field tools and equipment. The high price of oil has resulted in a surge in demand for these tools and equipment. Declines in the value of the dollar and increased international exploration have resulted in increased exports of tools and equipment to other oil producing regions. All of these factors have resulted in increased demand for crane served manufacturing and distribution facilities.  Current vacancies in Northeast and East sides of town are less than 6% in all crane-served product. The larger manufacturing tenants will probably need to build their own facilities, further afield from the traditional manufacturing areas, in order to get the type of crane served facility needed to support their growing businesses.