Houston Retail Market Report – 2Q 2011
Houston’s retail market continued to improve in the second quarter of 2011 with positive net absorption and lower vacancy rates. Over the last two years, Houston’s retail market has posted positive net absorption. Retail vacancy rates for all product types stood at 7.8%, down from 8.4% at this time last year. Developers have curtailed development, delivering only 190,600 SF of new retail space year-to-date through the second quarter and have only nine projects currently under construction. Overall, the local market is performing well under less than optimal economic conditions, namely sluggish job growth and low consumer spending levels.
Macro factors driving the absorption of retail space ultimately ties back to job count. According to the Texas Labor Market Review, total nonagricultural employment in Texas netted only 8,800 jobs in May, while at the local level, Houston’s MSA gained 16,500 jobs. Texas annual employment grew by 2.0%, while Houston’s grew by 1.8%.