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Reading the news of Exxon’s move to the Woodlands as well as one of our previous posts on whether Houston’s workforce will continue urban sprawl has sparked intense conversations on what this means for Houston residential and commercial real estate in The Woodlands as well as whether this is the right move for Exxon.

First, let me say that having lived in California I see first hand the flood of people moving from the West Coast to Texas, especially Houston and Austin. So, having members of Exxon from the Virginia campus move here is another exciting development. Let’s continue to bring jobs from both coasts to Texas!

However, I am somewhat skeptical of a major oil and gas company planting its headquarters over an hour (with traffic) from the center of the city.  Let me preface that these are my 10,000 foot views and I am sure there was much internal debate on where to place its headquarters.  The Woodlands may have been the only practical and viable deal on the table.

With that said…

Having family members who have and continue to work in the oil and gas industry, one of the largest issues facing these companies is their aging workforce. As there is a serious age gap between senior and middle management, competing for talent is a major issue and something taken very seriously by all major oil and gas companies (you should see the recruiting efforts at the University of Texas). These companies are so large and mature that the major competitive advantage in the future will be the quality and diversity of management and of their engineers.

These new graduates and immigrants to Houston are recruited heavily by every major oil and gas company and I think few are going to love the idea of either living in the Woodlands or commuting in heavy traffic every single day. I think recent graduates (who are generally young and single) want to live where the action is taking place. This is downtown, midtown, and surrounding areas, not the Woodlands which is more of a place for young families. Additionally, since Houston does not have mass transit to Woodlands, it may be tough to get the same level of diversity as the other oil and gas companies. Houston’s mass transit into downtown is weak, but at least there are options.

Overall, regardless of how beautiful Exxon’s new Woodlands office space should be, I believe relocating to the Woodlands will prove to become a competitive disadvantage for Exxon Mobil’s recruitment push when compared to other oil and gas companies in downtown.

What do you think?

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