Houston Retail Market Report
Market Resilience Evident Once Again in Houston;
Subdued Development Favorable for the Rebound
Vacancy seemingly hit a ceiling last year, now easing. The retail sector in Houston has displayed resilience time after time, in spite of natural disasters, energy industry downturns and now the COVID-19 pandemic. Availability in the metro has not topped 7.0 percent in any quarter dating back to 2012, a trend sustained during the health crisis. While vacancy soared by 100 basis points during the first nine months of a challenging 2020 to 6.8 percent, the rate subsequently moderated to 6.5 percent by the second quarter of 2021. Rent growth has been consistently strong as well. The average asking rate advanced by more than 3 percent during the 12-month period ended in June, on par with the consecutive 3.6 percent gains that occurred in each of the prior four-quarter spans. Fundamentals are supported by retailer demand that stems from a promising demographic outlook, with in-migration driving household creation and spending.