Houston, the Texas point-of-entry for retailers

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July 31, 2018

retailers

A recently completed retail center in north Houston.

For many retailers, Houston has become the choice point-of-entry to Texas. Meaning, when retailers look to expand to the Texas market, they are looking to Houston first. This comes as the result of strong population growth, a favorable business environment and years of sustained growth in Houston’s retail sector.

Signaling continued vitality in the local retail market, asking rents and construction activity ticked up in the second quarter of 2018.

Currently, the construction pipeline sits at 4.5 m.s.f., representing the market’s twelfth consecutive quarter with more than 4 m.s.f. of retail construction. Moreover, the market has recorded 18 consecutive quarters of sub-6 percent vacancy. Today, total vacancy sits at 5.4 percent, even after the closing of 18 Toys ‘R’ Us stores.

Second quarter leasing was driven in part by the expansion of national, boutique-style retailers into the Houston market. These retailers are part of a broader trend of targeted offerings to meet the demands of consumers in today’s retail environment.

Increased competition from ecommerce is forcing many retailers to innovate and the Houston retail sector is poised to reap the benefits, as it remains one of the nation’s hottest retail markets.

View our full Q2 2018 retail market report here.

Read more about our retail report in Globe St.

Here’s how Houston’s office, industrial and multifamily sectors performed in the second quarter.