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Houston’s strong economy pushes retail vacancy rates to historic lows

February 26, 2014 Leave a comment Go to comments

Retail rents were up and vacancies were down in the fourth quarter, reports Colliers International Houston. And it’s a trend that’s likely to continue.

WholeFoodsElevation

Construction on a Whole Foods is underway at the Vintage Marketplace off Highway 249 and Louetta Road.

Since 2008, retail vacancy rates have steadily gone down each year, reports Colliers. In the fourth quarter of 2013, vacancy rates were 7 percent, compared with 7.3 percent in the fourth quarter of 2012.

“Retailers, including restaurants, chase markets with strong demographics and projected growth. The job and population growth in Houston has been exceptional and is projected to stay strong. Retailers looking at potential expansion targets are well aware of this trend. We will continue to see retailers flocking to Houston,” said Patrick Duffy, president of Colliers International Houston.

Since the fourth quarter of 2012, average rental rates have increased 2.7 percent from $14.32 to $14.73, reports Colliers. Houston retail rental rates vary widely from $10 to $70 per square foot, depending on location, property type and building class.

Houston’s retail market posted 1.2 million square feet of positive net absorption in the fourth quarter, bringing the year’s total to 3 million square feet.

Currently, 947,000 square feet of new construction is slated for Houston, including a 71,400 square foot Whole Foods Market  located in Vintage Marketplace  and a 53,000-square-foot Top Golf USA located at Spring Park Center Blvd, just east of I-45 N.

Experts predict we will see new and expanded luxury retail in Houston as well as in the suburbs, such as the Woodlands and Katy.

Jenny AldridgeReporter- Houston Business Journal

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