Charlie Meyer, CEO & Co-Founder, Lovett Industrial

Invest: spoke with Charlie Meyer, CEO and co-founder of Lovett Industrial, about Houston’s industrial real estate market, the region’s competitive advantages, and the demand drivers shaping the next cycle of growth. “Houston is in a healthy position from both a supply and demand perspective,” Meyer said.

What changes in the industrial real estate market have had the biggest impact on Lovett Industrial over the past year?

The past year has marked a meaningful recovery for the industrial sector, driven by stronger leasing activity. Houston continues to outperform most major industrial markets. We cover 16 markets around the country, and Houston has consistently been one of the strongest performers in our portfolio because of its diverse economic base and long-term growth fundamentals.

Over the last year, we have seen an acceleration of demand across a broad range of industries. The major drivers have been high-tech manufacturing and energy-related requirements. Companies such as Foxconn are leasing significant amounts of space in Houston, while the solar industry continues to take space for both manufacturing and storage. Traditional oil and gas-related users are also growing as higher energy prices support investment activity.

Beyond those sectors, the fundamentals that have historically driven industrial demand remain strong. Population growth, the Port of Houston, and the region’s transportation infrastructure continue to support industrial activity. Houston has a unique combination of advantages that position it well for continued growth, and we do not see that changing anytime soon.

What are Houston’s biggest competitive advantages today, and what makes the region continue to attract investment?

One of Houston’s greatest strengths is its diversification. Historically, people viewed Houston as an oil town that lived and died by the price of oil, but that is no longer the case. The city and the broader community have spent a long time building a more diversified economy, which provides stability even when individual sectors experience downturns.

Houston’s position as a trade and logistics hub is another major advantage. With the largest port in the Gulf of Mexico, proximity to Mexico, and strong transportation infrastructure, the region is extremely well-positioned for trade-related activity.

The region also benefits from its growing population and relatively affordable cost of living. As the Houston metropolitan area continues to expand, logistics companies increasingly view the market as a destination for larger-scale facilities rather than simply an extension of other Texas markets.

Houston is also an extremely business-friendly environment. That competitiveness helps attract companies evaluating multiple locations and continues to support investment across a wide range of industries.

How would you describe the balance between supply and demand, and where do you see the market heading this year?

The market is healthy. We are one of the most active industrial developers in Houston, and we continue to see strong demand for the buildings we are developing.

Since I started the company six years ago, we have built more than 8 million square feet of warehouse space in Houston and leased every square foot. Our track record reflects the strength of the market and the demand we continue to see across the region.

That said, Houston is an easy place to develop. There are relatively few barriers to entry, plenty of land, and opportunities to bring new product to market. Because of that, developers always need to pay close attention to supply.

Demand has remained remarkably strong, even during periods when the broader U.S. industrial market has slowed. For the past several years, Houston has consistently performed well above its historical averages from a net absorption perspective, and we continue to see that trend today. Still, some areas can become overbuilt in the near term if supply gets ahead of demand.

As a developer, we focus on disciplined site selection and identifying locations with unique advantages that differentiate them from competing projects.

Overall, Houston is in a healthy position from both a supply and demand perspective. Demand fundamentals remain strong, but we are watching the supply side closely because it can become overbuilt.

How are reshoring, nearshoring, and supply chain trends affecting site selection and demand across Houston and the Gulf Coast?

We are still in the early innings of that trend, which is exciting. High-tech manufacturing, energy-transition projects, and other industrial users continue to evaluate Houston because of the region’s workforce, infrastructure, and ability to distribute goods efficiently around the world.

One of the most important factors today is power availability. Manufacturing users increasingly require significant power capacity, and that has become a critical site selection consideration.

Houston is extremely well-positioned in that regard. Access to power can be the deciding factor in whether a company chooses one market over another, and Houston’s ability to accommodate those requirements is a meaningful competitive advantage. As manufacturing activity continues returning to the United States, we expect that advantage to become even more important.

What is your perspective on water supply and utility capacity for industrial users?

Houston is well-positioned from a water and utility standpoint. Many large industrial users often have unique water and utility requirements, and there are various strategies available to accommodate them.

Compared with many other major markets, Houston has one of the strongest water positions in Texas and one of the better situations nationally. In more arid markets, water availability can become a significant limitation. Houston does not face those same challenges, which provides another competitive advantage when companies are evaluating locations. That is one of the reasons Houston continues to outperform many competing markets.

How are automation, AI, and other innovations influencing industrial real estate?

We are still in the early stages of understanding the full impact, but there is a lot of conviction that automation and AI will support more domestic manufacturing activity. As technology makes manufacturing more efficient and less dependent on lower-cost overseas labor, it should become easier and more economical to produce goods within the United States. That is positive for industrial demand overall.

We are already seeing some of that through reshoring activity, but this is a trend that will continue to evolve over the next decade. For our industry, that creates the possibility of future demand drivers that are only beginning to emerge today.

How does Houston’s workforce influence site-selection decisions and project delivery?

Houston benefits from a unique workforce ecosystem. The region has strengths in healthcare, energy, engineering, aerospace, and other technical fields, creating a deep and diverse talent pool that can support a wide range of industries.

As more advanced manufacturing and technology-related users enter the market, that workforce becomes increasingly valuable. Companies want access to skilled labor, and Houston offers that at scale.

From a construction standpoint, the labor market has also been dependable. Compared with many other markets, we have experienced relatively few workforce availability issues. Houston’s established contracting community and experienced labor force make it easier to deliver large-scale projects efficiently and on schedule. 

Where do you see the greatest opportunities for growth for Lovett Industrial and for the Houston region as a whole?

We are excited about the manufacturing requirements we continue to see entering the market. Many of these projects are large in scale, and the challenge is identifying locations that can provide the necessary power, land, and infrastructure.

Certain parts of the Houston region are especially well-positioned for the next phase of growth. Conroe is a good example. It offers land availability, a business-friendly environment, and access to a strong workforce.

Rosenberg is another area we are watching closely. Traditional industrial hubs such as Sugar Land and Stafford have limited land remaining, while Rosenberg still offers opportunities for development and access to the same labor pool.

More broadly, the continued interest from manufacturers, pharmaceutical companies, and other industrial users is encouraging. Houston has done a good job creating an environment that can accommodate these types of investments, and that positions the region well for future growth. As companies continue to prioritize access to power, infrastructure, and workforce, Houston remains one of the most attractive markets in the country for industrial investment.