Despite a pandemic hitting during construction, Gatewood said he believes there is still a strong demand for office space in Tomball.
“So far ... there’s been out of about 40 [of our] tenants in and around Tomball, we have had two that have not been able to continue business because of COVID[-19],” Gatewood said. “There’s still going to be some rough times because of COVID, but people are still wanting to come to Tomball. About two or three weeks ago my phone started ringing again, my email started coming through, and people were looking at office space, talking about buying buildings.”
The Rosewood project, located near the U.S. Post Office, will feature six buildings with two condominiums each that clients can purchase rather than rent. A new buyer can move in quickly within 90 days and customize the build-out plan for the 1,400-2,800-square-foot space, Gatewood said.
“There was a shortage in the supply of small office buildings in Tomball. I saw that by talking to my customers and prospective customers, and we were just trying to fulfill that need,” he said.
Like Gatewood, Robert Parr—director of corporate strategy for Tomball Grand Storage—said he has seen increased demand the last few months for the property’s small office spaces despite a national push toward remote work. In addition to storage, Tomball Grand Storage includes 17 office suites measuring 300-400 square feet, he said.
Tomball Grand Storage reopened last fall, debuting the new Boudreaux Road facility, including the office suites, Parr said. The suites feature all-inclusive pricing, meaning parking, utilities and use of common areas are included in the monthly rent of $799-$999, which offers business owners a fixed cost and less financial stress, he said. Month-to-month options are also available to lessen the risk for businesses.
“If I’m someone, and I’m trying to launch my business, costs are death. They’re what kill your business and kill dreams,” Parr said.
Since the onset of the pandemic, Parr said he believes small office space has a strong future locally as companies downsize and try to cut costs.
“We’re serving two customers: One is the person who’s kind of been starting that business in their garage, their kitchen table and out of the back of the truck," he said. "We’re also working for folks coming the other way. ... They’ve been in a larger office and for whatever reason, it’s too much for them now. ... They need to cut costs just to ride out the economic uncertainties. Maybe they have discovered they don’t need as much space as they thought they did because instead of paying someone to sit at a desk and answer the phone, you can pay them to sit at their house and answer the same phone.”
Data from Caldwell Cos. for the Tomball and Magnolia area shows interest in office space locally has picked up. The office vacancy rate fell from 15% in February to 13% in May. Additionally, the local vacancy rate is several percentage points below the Houston market total vacancy, which rose from 21.5% in February to 21.9% in May, based on monthly reports from NAI Partners. Kelly Violette, the executive director of the Tomball Economic Development Corp., said a few local employers are looking at possibly selling or leasing underutilized space within the next year amid the push for employees to work remotely.
“I’m seeing just some comments from business owners that are looking at this as an opportunity to save some money while keeping their people still employed and know that they can still be productive,” she said. "I think we have a lot more supply than we do demand right now. From the standpoint of Tomball, I don’t necessarily in the near future see office-only projects. ... I think COVID has obviously changed the mindset of some of the space that is needed."
Industrial projects
However, Tomball is continuing to see interest on the commercial front, Violette said.In April, Hoelscher—a family-owned weatherstripping company—opened in the TEDC’s Business and Technology Park as planned, although a ribbon-cutting ceremony has been delayed amid the pandemic, she said.
Plans for a new brewery and restaurant located at the Business and Technology Park are also moving forward, Violette said; however, the facility operators cannot be named due to a confidentiality agreement until the property is finalized, likely this summer.
The facility would include a 10,000-square-foot building with an indoor brewery, restaurant, beer garden and playground with space for future building and parking areas, Community Impact Newspaper previously reported.
Amid the pandemic, both Whitmeyer’s Distilling Co., located in Houston, and Wildcat PPE, an offshoot of Magnolia-based Wildcat Cables, corresponded with the TEDC throughout April to pursue Tomball locations, Violette said. The TEDC was set to give Wildcat PPE a job-generating grant, but negotiations with a property owner in Tomball fell through, Violette announced at a June 15 city council meeting. The company announced its move to Conroe instead on its Facebook page June 16.
However, Whitmeyer’s began bottling its hand sanitizer at a TEDC property on South Live Oak Street in late April, Violette said, as the distillery shifted operations during the onset of the pandemic. The TEDC first approached Whitmeyer’s a year ago about coming to Tomball, but the timing was not right, she said.
The company is now in the permitting process for manufacturing its sanitizer in the Business and Technology Park, Violette said, as operations outgrew the previous space. Long term, Violette said Whitmeyer’s is eying the South Live Oak Street property for a potential development featuring its distillery as well as an event venue with plans going to City Council in July.
“If this goes through and Whitmeyer’s is able to do that, I think it definitely would be a huge asset to our downtown and a big economic driver for downtown,” she said.
