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Q4 2015 Houston Retail Market Research & Forecast Report

03/17/2016
Published By: Lisa Bridges

Houston’s retail market remains remarkably strong despite downturn in the energy industry

Despite the decrease in oil prices over the past year and the negative effects felt in the office and industrial real estate sectors, Houston’s retail market has remained resilient. Houston’s average retail vacancy rate remained steady between quarters at 5.8%, and decreased 30 basis points from 6.1% over the year.

During the fourth quarter, 1,153,907 SF of Houston’s retail inventory was absorbed, pushing the year-end 2015 net absorption to 4.2M SF. Retail leasing activity increased 53.4% between quarters, recording 979,400 SF in Q4 2015. The citywide average quoted retail rental rate increased marginally between quarters from $15.15 to $15.20 and annually by 2.1% from $14.88 per SF NNN.

Approximately 2.8M SF of retail space is under construction and 52.5% is pre-leased. Over 1M SF of new inventory delivered during the fourth quarter and 83.0% of the new product is pre-leased. Several new stores opened in River Oaks District including iPic Theatres, Hermes, Cartier, and Harry Winston to name a few. 

According to the U.S. Bureau of Labor Statistics, the Houston metropolitan area created only 23,700 jobs between November 2014 and November 2015. This is an annual increase of just 0.8%, well below the 2014 annual growth rate of 3.4% (97,500 jobs). Local economists have predicted 2015 annual job growth will be around 20,000 jobs, however, we believe that number will be lower.

Release Date03/17/2016 - 12:36

Source

Colliers International

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