Data from NAI Partners shows leasing activity for industrial spaces in the Houston area was down between May and July. This is partly due to the new space that opened in the region this year, per NAI’s monthly reports.
However, NAI data shows companies leased almost 2 million square feet more of industrial space this August than August 2019. August also brought 8 million more square feet of new industrial space than last year.
Sherri Gates, co-owner of Gates Engineered Lubricants in the East Montgomery County Industrial Park, said the pandemic forced her family to lay off three employees as sales plummeted for about six months and industries plummeted for about six months and industries that purchased her products shut down. In August and September, however, Gates said business began slowly picking up again.
The business, which relocated to the industrial park in 2015, manufactures lubricant blends for oil and gas, medical, precision parts and aerospace industries, to name a few. While business was slow, Gates said her family invested in the facility, remodeling its interior and buying new equipment.
“People with entrepreneur minds do not look at negatives; they are focused on positives and the future,” she said. “They know that this pandemic will not last forever. They know there’s a future for business.”
The more than 700-acre park opened in 2002 on Gene Campbell Road between FM 1314 and FM 1485. The park was funded by the East Montgomery County Improvement District, an entity that collects sales tax revenue within its boundaries.
Despite the pandemic, EMCID President and CEO Frank McCrady said the district has purchased 215 additional acres to expand the park in the last six months. He said increased interest in the park from new tenants has, in part, spurred the expansion.
“With the current economic environment, a lot of manufacturers across the country had the opportunity to pause and shutdown,” he said. “That ... allowed them some time to do some strategic planning, and I think that’s what we’re seeing now.”
New tenants, expansions
The industrial park is home to 22 companies, five of which are expanding or have plans to expand in the near future, McCrady said.
McCrady said the company behind Power Supplements, an energy drink and supplements business that broke ground in September 2019, will expand into a new venture this year. E9 Capital was set to buy 10 acres in October or early November for New Caney Beverage, a hand sanitizer and disinfectant company, McCrady said.
Additionally, EXP Controls President Rob Stanchi said he is considering expanding his 5-acre business by 4 acres nearby. EXP Controls, which relocated to the park in 2018, builds electrical control panels for petrochemical refineries, wastewater treatment plants and similar sites.
“When I see there’s light at the end of the tunnel, I’ll probably pull the trigger to do something by the end of the first quarter of next year,” he said.
Meanwhile, the EMCID board of directors recently gave the green light to two new businesses to join the park, with other future tenants in the works. Directors approved a 123-acre tract for The Cubes at EMC Industrial Park on Sept. 25 and 11.5 acres to Multi Seal Corp. on Oct. 8.
EMCID officials said they were not able to comment on The Cubes at EMC Industrial Park. A spokesperson for CRG, the developer of The Cubes, also declined to comment on the land purchase. However, according to CRG’s website, the company has developed or will develop at least 11 other logistics facilities across the nation with The Cubes branding.
In addition to the 215 acres purchased in the last six months, EMCID is also pursuing almost 150 more acres to continue expanding the industrial park, McCrady said.
“We’re always looking for opportunities and more amenities to provide for our tenants at the park, so having a way for them to expand and continue to grow is certainly something that’s important to us,” he said.
Ongoing growth in the park could bring hundreds of new jobs from the announced new tenants and expansions, with The Cubes at EMC Industrial Park bringing about 200 jobs, McCrady said. About half of all jobs at the park could be hired from within the EMCID’s boundaries.
When the EMCID negotiates contracts with companies coming into the industrial park, there is often a hiring requirement, McCrady said.
“Every agreement is different, but most of them we require at least 51% of positions to be filled by East Montgomery County residents,” he said. “Some [companies] exceed that by far, but our requirement is to hire from our community.”
According to five-year estimates from the U.S. Census Bureau’s American Community Survey, 5,393 residents in ZIP codes 77365, 77357 and 77372—the ZIP codes that largely make up the EMCID’s boundaries—worked in the manufacturing, warehousing and transportation industries in 2018. This accounted for roughly 16.5% of the area’s workforce aged 16 and older.
EMCID officials estimate roughly 1,200 people are employed at the industrial park. About 700 employees work at the Walmart Distribution Center, which was the first tenant in the park and is the second-largest employer in the EMCID boundary after New Caney ISD, according to the EMCID website.
If EXP Controls pushes forward with its 4-acre expansion, Stanchi said he will need to hire 10-20 new employees to manufacture electrical panels in the new space.
“I’m always looking for people of bright character who have a good attitude and are willing to learn and make things happen,” he said.
Levitated Metals, which uses a density flotation process to separate metal particles and sell recycled metal, is a startup company set to open soon in the park. Owner Ronak Shah said the 10-acre site also allows expansion in the coming years because the current facility takes up roughly half of the site.
Shah said he has hired five employees and hopes to hire up to 10 more before the $10 million facility opens in late November. More could be hired before the end of the year.
He said he plans to hire skilled mobile equipment operators as well as entry-level manufacturing positions—many of which he hopes to hire from the East Montgomery County area.
“We really are looking to hire local because there are skillsets and personnel, I think, that would be excited to be working somewhere closer to home,” he said.