HOUSTON – (Realty News Report) – Shopping center space is hard to find in Houston, despite the store closures by a number of troubled retailers. The occupancy rate in Houston hit 94.9 percent at year end, the highest retail occupancy rate in many years, according to CBRE.
In recent months Toys R Us closed its stores in Houston and Mattress Firm (after declaring Chapter 11 in October and emerging from bankruptcy court in late November) closed 25 Houston stores in addition to hundreds around the nation.
But the strong retail market has been filling the empty spaces in rapid fashion, said Lacee Jacobs, senior associate for CBRE in Houston. “Users were waiting in the wings,” Jacobs said at the CBRE press event Wednesday.
Jacobs said other new trends in the shopping center business: (1) Second story space is becoming a viable option in the face of rising rents. (2) Retailers are reduced the size of their stores. (3) Online retail sales impact the way retailers and restaurants do business and their space needs evolve. (4) Quick service restaurants with healthy fare.
Restaurants are doing a lot more carry-out business, sometimes are much as 30 percent of sales, Jacobs said. This requires different configuration of the eateries, such as a having separated entrances for to-go customers. Smaller dining rooms are sufficient and that means they want to lease smaller spaces.
“This year the buzz word is ‘Food Hall,’” Jacobs said.
The newest hall, Finn Hall, opened its doors in early December, bringing over 20,000 SF of eateries and bars to the art deco tower at 712 Main in downtown. Some of the vendors include Amaya Coffee, Dish Society, and Goode Company. Finn Hall, named for Alfred C. Finn, an architect who designed the building and a number of other art deco properties decades ago. The restaurants in Finn Hall will be providing downtown food delivery and catering services to the neighboring residents, office buildings, and hotels.
Other new chef-driven food halls include Lyric Market, Bravery Hall and the Understory at Skanska’s new Capitol Tower.