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Q2 2014 Houston Retail Market Research & Forecast Report
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Houston's 6.3% Retail Vacancy Rate at a Record Low
Houston’s retail market posted 1.2M SF of positive net absorption in the second quarter. Some of the tenants who opened new locations during the quarter include Whole Foods Market, Kroger Marketplace, Conn’s Appliances, Horse & Rider, Vineyard Vines, Trina Turks, Brucettes Shoes, and Harbor Freight Tools.
The average citywide vacancy rate fell 30 basis points between quarters to 6.3% from 6.6%, and by 50 basis points over the year from 6.8%. Currently, there is 1.2M SF in Houston’s retail construction pipeline, which includes a 136,000-SF Sam’s Club located at the NEC of Bellaire and West Grand Parkway, and a 90,900-SF HEB located on the southeast corner of San Felipe and Fountainview.
The citywide average quoted rental rate for all property types increased 3.1% from $14.73 to $15.19 per SF between quarters and 3.0% from $14.75 in Q2 2013. Houston retail rental rates vary widely from $10.00 to $85.00 per SF, depending on location, property type, and building class.
The Houston metropolitan area added 93,300 jobs between May 2013 and May 2014, an annual increase of 3.3% over the prior year’s job growth. Local economists have forecast 2014 job growth to remain strong, expecting between 68,000 and 72,000 new jobs. Houston’s unemployment rate fell to 5.0% from 6.1% one year ago. Houston area home sales were down by 7.3% between May 2013 and May 2014, the first decline in the past 34 months. The reduction was due almost primarily to a lack of inventory.
Release Date07/15/2014 - 07:00