Occupancy is at 93.9%, down 70 basis points from this time last year, and the first time Houston retail occupancy registered below 94.0% since 2014.
Market fundamentals. Occupancy is at 93.9%, down 70 basis points from this time last year, and the first time Houston retail occupancy registered below 94.0% since 2014. The Houston retail market has recorded 2.5 million sq. ft. of leasing activity—which is comprised of both new leases and renewals—down 8.6% from one year ago. The net amount of square feet absorbed (moveins minus move-outs) stands at 60,000 sq. ft., with new supply delivering 2.1 million sq. ft. to the market this year, of which 72.7% is occupied. Of the 3.0 million sq. ft. currently under construction, 63.3% of that space is spoken for. The average asking rate of renting retail space in Houston is at $18.10 per sq. ft. on a triple net basis, down $0.01 compared to this time in 2019.
Phase 3 of reopening. Despite some Houston restaurants closing due to COVID-19, out-of-state food chains continue to expand into the Houston metro, while others are now under new ownership or are trying out new ideas. Local news outlets report that doughnut chain Voodoo Doughnuts is opening a second Houston location in Montrose and hot dog chain Wienerschnitzel has plans to open two more locations in the Houston area. New sushi restaurant, UME, is opening in the Heights and the 13-year-old downtown Reserve 101 whiskey bar reopened with a new, chicer look.
Closed home sales down for a second straight month. According to the Houston Association of Realtors, the combined impact of the coronavirus pandemic and slumping oil prices drove the Houston real estate market down for a second consecutive month in May. Single-family home sales, total property sales, pricing and total dollar volume all fell compared to May 2019. Pending sales, however, jumped 23.1%. Total active listings, or the total number of available properties, was down 8.3%.
Director of Research
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