Houston’s Retail Market – 0.6M SF Under Construction
Houston’s retail market posted 397,000 SF of positive net absorption in the first quarter, which is significantly less than the 1.1M SF posted in the previous quarter, but is a positive gain from the -352,000 SF posted one year ago. Some of the tenants who opened new locations during the first quarter include Sprouts Farmers Market, Main Event, Mattress Firm, and Freddy’s Frozen Custard & Steakburgers.
Although 154,000 SF of new retail space delivered during the first quarter, Houston’s retail vacancy rate decreased from 7.1% to 7.0% between quarters and from 7.2% over the year. Currently, there is 585,000 SF in Houston’s retail construction pipeline. Some of those projects include Whole Foods’ newest location in BLVD Place, Costco’s newest location in Sugar Land’s Telfair, and the L.A. Fitness located at 4400 N Shepherd Drive and W 43rd St.
The citywide average quoted rental rate for all property types increased from $14.34 to $14.68 per square foot between quarters and from $14.60 one year ago. Houston retail rental rates vary widely from $10.00 to $70.00 per square foot, depending on locationand property type and class.