Published Jul 14, 2022 by A.J. Mistretta
Despite rising inflation and concerns over a possible recession, Houston’s hot retail market is showing no signs of slowing down.
A new report from real estate giant CBRE shows Houston’s occupancy rate inched up to 94.3% in Q2, a 0.8% increase over Q1. The market absorbed 1.6 million square feet of space with the Far North submarket leading the way.
CBRE records 668,000 square feet of new retail space hit the market in the most recent quarter with another 4.2 million square feet under construction—that’s nearly 1 million square feet more than was estimated in Q1 and indicating developers are bullish on the market’s future.
Houston recovered all of the jobs it lost at the outset of the pandemic last quarter and data shows consumer spending was up 6.6% in Q2 over the previous quarter.
A number of high-profile development projects across the region are adding significantly to the retail footprint. The first phase of the massive East River project just east of Downtown will include 100,000 square feet of retail. The Katy Boardwalk District will bring 155,000 square feet of retail to that community. And hundreds of thousands of square feet of new space is set to come online in coming years across multiple mixed-use projects lining Allen Parkway to the east of Downtown.
Unlike the office and industrial sectors of commercial real estate that rely more heavily on broad business conditions, retail growth is weighted more toward overall population growth. While the City of Houston and Harris County saw declines in population in the most recent Census data, the region as a whole added more than 69,000 new residents this year; the current metro population now stands 7.2 million.
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