Q2 2017 | Houston Retail | Research & Forecast Report

Houston’s retail market continues to expand following increased population, jobs and housing growth in suburbs

Houston’s retail market has remained healthy through mid-year 2017, with low vacancy, steady leasing activity and positive absorption. Despite 1.5M SF of new construction deliveries in Q2 2017, the average vacancy rate remained unchanged from last quarter, at 5.6%. Almost half of the 2.3M SF of retail space under construction is preleased and 83% of new construction delivered in 2017 is occupied.

Houston’s retail leasing activity, which includes renewals, increased over the quarter from 1.2M SF in Q1 2017 to 1.4M SF in Q2 2017. Much of the high-end class A space located within the major innercity retail hubs is 90-100% leased. It is hard to find good quality well located available space. Most of the space that is available is in older centers or projects under construction in the suburbs near new master-planned residential development. Many large retailers such as Macy’s and Sears, have announced store closings, but there are still new retailers entering the Houston market such as Dirt Cheap, a deep-discount chain, which recently leased space in 3 locations.

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