The industrial real estate market in Midland is expected to see a steady recovery and growth in 2025, driven by renewed optimism in the oil and gas industry.
As the region continues to benefit from the resurgence of the Permian Basin and the energy sector, experts anticipate increased demand for industrial properties, especially in the service sector. According to Dakota Flowers, an associate at NRG Realty Group, the outlook for the market is positive.
“I expect renewed confidence in the oil and gas industry with the recent inauguration of a more pro-energy administration, setting a strong tone for the year ahead," Flowers told Midland Times. “Following the 2024 election, service companies, previously hesitant to commit to new leases or property acquisitions, showed a noticeable uptick in activity. While the full impact on the nation's oil and gas industry will become more clear later in the year, the current trajectory is definitely upward."
One key factor influencing the market is the ongoing growth of the Permian Basin, which has long been a vital source of oil and gas production. Though there is currently a slight oversupply of industrial buildings in Midland, attributed to consolidations among oil and gas operators, experts predict that activity in the region will increase as the nation’s energy landscape evolves.
“With the new administration’s more supportive stance on energy production, potential rising activity in some of our nation's other hydrocarbon-producing regions could pull equipment away, which would result in an eventual supply gap in the Permian," Flowers said. "This could drive steady expansion in the service market, drawing new entrants, fostering the creation of service companies and ultimately increasing industrial real estate demand here."
Despite this, Flowers suggests that the pace of growth will be gradual, noting his expectation of “stable activity” over the 2025 year and a “sustained positive momentum in the years proceeding.”
In terms of specific areas to watch for development, one location stands out as a potential hotspot for industrial growth. The area surrounding the intersection of N TX-349/FM 1788 and TX-191 is gaining traction due to its strategic location. In fact, the area has been noted as an “economic driver” by city officials.
“I believe many service companies are overlooking the strategic advantages of this area," said Flowers. "This zone is gaining traction partially due to its efficient access to the Delaware Basin while bypassing the current congestion along the I-20 corridor. The growing interest has already spurred development, with a major project breaking ground along N 1788. Several service companies are already operating in this region, and I suspect even more will establish a presence there in the near future."