National and regional restaurants and grocers expand in the Houston Retail Market
As Houston’s population grows so does the need for food, and national and regional retailers are responding to this demand. In the past 15 months 450,000 square feet of new restaurant and grocery store space has been added to Houston’s retail market. Some of the tenants that have expanded in Houston include Raising Cane’s, Carl’s Jr., Freddy’s Frozen Custard & Steakburgers, World of Beer, Buffalo Wild Wings, Cheddar’s, la Madeleine, Panera Bread, H.E.B., Joe V’s Smart Shop, Trader Joe’s, Whole Foods Market, and Aldi.
According to numbers released by the U.S. Bureau of Labor Statistics, Houston added 12,800 retail jobs over the past year, a 4.9% growth rate. 10,000 of those jobs came from the food and beverage stores sector.
Houston’s retail market posted 352,000 square feet of negative absorption in Q1 2012 mainly due to tenants vacating older highly depreciated shopping centers. The average retail vacancy rate remained unchanged between Q4 2011 and Q1 2012 at 7.2%, but decreased from 7.8% on a year-over-year basis. The overall citywide average rental rate decreased between quarters; however, up-scale rental rates increased slightly or remained the same. Most of the retail growth has occurred in submarkets near and around master-planned residential neighborhoods such as Telfair, Cinco Ranch and The Woodlands.
The Houston metropolitan area added 93,400 jobs between February 2011 and February 2012, a 3.7% increase. Unemployment fell to 7.2% from 8.4% one year ago. Houston area home sales increased by 16.9% compared to February 2011 sales. As Houston’s MSA continues to see healthy job growth and a strong housing market, Houston’s economy is expected to remain healthy for both the near and long-term.
Houston Retail Market
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