Q3 2015 Houston Retail Market Research Report
Houston’s retail market leasing activity decreases 41.9% in Q3 due to limited available space
During the third quarter, 570,600 SF of Houston’s retail inventory was absorbed, about half of the 1,171,800 SF absorbed in the previous quarter. Retail leasing activity decreased 41.9% between quarters, recording only 611,500 SF in Q3 2015. When compared to the 1,490,500 SF recorded 12 months ago in Q3 2014, leasing activity decreased 59.0%. The decline in leasing activity is mostly due to a lack of available space as Houston’s retail inventory is 94.0% occupied.
Fortunately, there is currently 2.6M SF of retail space under construction, but only 25.0% is available as 75.0% is pre-leased. Close to 400,000 SF of new inventory delivered during the third quarter and 83.0% of the new product is pre-leased.
Houston’s average retail vacancy rate decreased slightly from 5.8% to 5.7% between quarters, and decreased from 6.1% over the past year. The citywide average quoted retail rental rate decreased marginally between quarters from $15.18 to $15.15 and annually from $15.05 per SF NNN.
The Houston metropolitan area created 38,400 jobs between August 2014 and August 2015, an annual increase of 1.3%. Sectors creating most of the jobs contributing to the annual increase include Legal Services and Accommodation & Food Services. Employment sectors that lost the most jobs over the year include Durable Goods & Manufacturing and Real Estate & Rental and Leasing.
Click here to visit our website and view the full report.