HOUSTON – Houston’s retail center real estate sector, virtually unblemished by a decline in the energy industry, is one of the strongest shopping center markets in the nation, according to Robert Kramp, director of research and analysis for CBRE.
The retail center occupancy rate in the Houston area has reached 94.2 percent, a record high, according to second quarter statistics by CBRE.
The demand for new stores in the suburbs is high as retail center developers catch up with strong homebuilding activity that has placed Houston as the national leader in housing starts in recent years.
Retail center absorption totaled 1.5 million square feet in the second quarter – the highest quarterly retail absorption since the fourth quarter of 2007, CBRE reported.
“Our retail sector is one of the big stars on the horizon,” Kramp said at CBRE’s second quarter press luncheon Tuesday.
In fact, Kramp said, Houston’s retail center market is one of the best in the nation.
The reasons?
- Houston has been one of the national leaders in population growth in recent years.
- Retail center construction has been “disciplined” without wild overbuilding.
- The Grand Parkway – an outer belt in the outlying areas – has opened up great swaths of undeveloped land. A 39-mile section of the Grand Parkway across north Houston was recently completed.
Grocery stores, restaurants and fitness centers are all adding locations.
The gains in retail statistics come even as some retailers, such as Sports Authority, Fresh Markets and Radio Shack retreat and close stores due to shakeouts on the corporate level.
While the retail sector is hot, other parts of Houston’s commercial real estate market are getting colder, such as office.
The availability rate for Houston office space reached 19.8 percent in the second quarter, the highest rate in many years, CBRE reports.
CBRE’s Elliot Hirshfeld says the Houston office market is in the “doldrums” and the second quarter showed negative absorption overall.
And the office leases that have been done in 2016, tend to be smaller deals, Hirshfeld said.
July 20, 2016