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Occupancy is at 93.5%, down 100 basis points from this time last year, with July and August marking the first times Houston retail occupancy registered below 94.0% since 2014.
Market fundamentals. Occupancy is at 93.5%, down 100 basis points from this time last year, with July and August marking the first times Houston retail occupancy registered below 94.0% since 2014. In addition, the net amount of square feet absorbed (move-ins minus move-outs) stands at negative 827,000 sq. ft. Overall negative absorption had not been realized in the Houston retail market in over a decade. 2.7 million sq. ft. of new supply has been delivered to the market so far in 2020, of which 70.3% is occupied. Year-to-date through August, the Houston retail market has recorded 3.8 million sq. ft. of leasing activity—which is comprised of both new leases and renewals— down slightly from one year ago. The average asking rate of renting retail space in Houston is at $18.29 per sq. ft. on a triple net basis, down $0.16 compared to this time in 2019.
Academy prepares to go public. The sporting goods retailer, which is based just outside of Houston in Katy, Texas, reported $5.3 billion in sales and $204 million in profits for the 12-month period that ended in July. The company saw e-commerce sales jump 284% in the first half of 2020, following an 8% growth in 2019, according to its registration filing. Sports and outdoor retailers have seen sales flourish during the pandemic. Academy’s filing highlights the outdoor and fitness segments doing well in light of Covid-19 precautions. Cycling shops, fitness equipment sales and recreational stores have experienced a banner year in 2020.
Shifting values and shifting dollars. “Leasing fundamentals should remain steady, led by strong tenants that have made provisions through 2020 and have a creative plan for 2021, 2022, and even 2023,” said Jason Gaines, Senior Vice President of Retail Services at NAI Partners.
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