There was a time when trading floors were a given part of most major energy real estate deals in Houston. Think of the massive, open-air trading floor Enron was building in its new office tower at the corner of Smith and Bell (actually four 53,000-square-foot trading floors). Not so anymore, according to an article at GlobeSt.com :
“Although energy companies and financial institutions are flocking to Greater Houston and energy and power trading is active, there is little demand for trading floors.
“We haven’t seen any kind of resurgence in trading floors. Based on feedback from insiders, we wouldn’t necessarily expect to see any type of resurgence in the next couple of years,” Carleton Riser, managing director of Transwestern’s Houston office, tells GlobeSt.com.
We have written about the trading business rebounding in Houston following the demise of Enron, thanks to high commodity prices and banks’ interest in expanding the range of products and services they office customers. But most have taken up pre-existing trading spaces or are taking up less space. And as the GlobeSt.com article points out:
“Louis Cushman, vice chairman for Cushman & Wakefield Inc., says he sees more of a trend in that East Coast companies are setting up Houston trading operations by piggy backing on existing trading centers rather than developing their own. Building one from scratch can be time-consuming and somewhat costly, he points out.
“There’s lack of space, particularly Downtown,” he says. “By definition, the only way you’ll get an existing trading floor is if someone moves.”
One interesting detail from the story: one broker say he has a request from one tenant “…a large utility company in the US — that wants to open a power and energy trading floor and wants it up and running before the end of the year.”
Who do you think that is? Give us your best guess.
(Thanks to Chron real estate reporter Nancy Sarnoff for pointing out this story).