Houston is leading the nation in shopping center construction, according to the Marcus & Millichap real estate firm. In its second quarter retail research report, the firm predicted 3.3 million square feet of retail space will be completed in the Houston area this year, more than any other market in the country.
Job growth is rather puny, but at least Houston’s economy is growing, instead of losing jobs. Population growth is strong and retailers are still playing catch-up with the home construction boom that’s added a lot of rooftops in the suburbs and multifamily density near the urban core.
And the retail vacancy rate is low – around 5 percent. Inside the Loop, it’s even tighter – only 3.8 percent, Marcus & Millichap says.
Grocers invade Houston full-speed ahead in 2016. HEB is building a revolutionary two-story grocery store in Bellaire and a 107,000-SF store in Kingwood. Aldi, Wal-Mart and Kroger are also expanding in the grocery sphere.
The 1.8 million SF Valley Ranch is under construction north of Kingwood and 450,000 SF Shoppes at Parkwest is being developed on the west side.
Even though the energy industry has rattled the Houston economy, home building is still fairly strong for now. Metrostudy reports Houston is number two in housing starts behind only Dallas.
Trot out the old saw again: Retail follows rooftops. So with home building in fair shape – Houston retail could sail along for a long time.