Q3 2015 Houston Retail Market Research Report

HOUSTON - Nov. 3, 2015 - PRLog -- 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.

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