HOUSTON – Basintek LLC, an oilfield equipment manufacturer, has renewed its existing lease and added 50,000 square feet to its manufacturing facility in north Houston, near George Bush Intercontinental Airport.
The expanded 200,000-square-foot lease ranks among the largest industrial transactions of 2017, according to NAI Partners. Nick Peterson and John Ferruzzo of NAI Partners represented Basintek; the company produces downhole drilling motor power sections.
“Arranging a lease of this magnitude for a drilling company in expansion mode is a breath of fresh air for Houston and a testament to the city’s slowly recovering oil and gas industry,” Peterson said.
The national rig count, which tracks the number of active drilling rigs, has climbed this year to nearly 1,000 after falling below 500 the previous year.
Basintek’s Houston facility is at 713 Northpark Central Drive in a Prologis building about two miles west of the airport, situated between Interstate 45 and the Hardy Toll Road near East Richey Road and Imperial Valley Drive.
In addition to its Houston location, Basintek operates a manufacturing plant in Edmonton, Canada, and maintains staging facilities in Dubai and Odessa, Texas.
West Texas Intermediate crude prices peaked in June 2014 near $107 per barrel before a sharp decline that accelerated after OPEC’s decision not to curb production on Thanksgiving Day 2014. By early 2016, prices had fallen below $30 per barrel.
Oil prices later recovered, rising above $54 per barrel earlier in the year, though they eased in recent weeks to roughly $46 per barrel.
An ongoing global oil supply surplus prompted forecasters to lower year-end projections. The U.S. Energy Information Administration revised its forecast to about $50 per barrel by year-end 2017, down from prior estimates near $60.
The fall in oil prices and the corresponding reduction in drilling activity—U.S. rig counts were nearly 2,000 at their peak a few years ago—have affected Houston’s real estate market. Known as the Energy Capital of the World, Houston experienced notable impacts in certain property sectors.
While many segments of Houston’s real estate market, including much of the residential sector, remained resilient despite lower oil prices, industrial properties tied to manufacturing suffered. Smaller crane-served industrial buildings under 50,000 square feet were especially affected.
Houston’s office market also faced significant pressure as oil companies cut staff and vacated large blocks of space.
An expansion lease by an oilfield equipment maker such as Basintek is therefore notable. Whether this growth represents an isolated case or signals the beginning of a broader industry recovery remains to be seen.