Q3 2020 | Houston Retail | Research & Forecast Report
Houston's retail landlords work creatively but cautiously with vetted tenants to close the deal
As COVID-19 continues to press on, tenants and landlords are working on their real estate strategy for the future. Many months later, we must all now accept the fact that COVID-19 has made its permanent imprint on the real estate decision-making process. As a result of this impact, we see a discrepancy between landlord and tenant expectations for new leases. To state the obvious, the active tenants in today's market are looking for deals. Deals can come in many forms, whether it be percentage rent, step rent, flexible commencement dates, more substantial landlord concessions, etc. While it certainly is a tenant's market right now, the tenant does not necessarily hold all the cards. Based on what Colliers sees in the Houston market, there is a misconception that the tenant is entirely in the driver's seat. What is not evident is that most landlords are not desperate for just any deal put in front of them. In fact, their approach proves to be far from that.
The majority of the real panic around COVID-19 has mostly settled, and landlords are no longer making rushed decisions to keep their centers full. In fact, many landlords are becoming extra cautious about which tenants they allow in their centers. We see stronger landlord involvement in vetting and interviewing prospective tenants. Landlords want to know a tenant's marketing plan, how they intend to achieve success and how their other locations are performing. Of course, these are all boxes they have always checked, but not quite to this degree. They need to know that a prospective tenant is substantial and qualified.
Not only are landlords becoming more methodical on who they allow in, but many are... To read the full report, click here: https://www2.colliers.com/
Lisa Bridges | Director of Market Research