2023 News Archive

The Houston retail market looks promising as it works to keep up with rooftops and strong consumer demand. Houston retail is the 5th largest market in the US with over 428 million SF supporting its robust, growing population. With only 20.6 million SF available, its 4.8% vacancy is primarily older centers looking for new life. This lack of new product has motivated tenants and developers to deliver over 993,000 SF in 1Q23 and start construction on over 4.5 million SF of new retail projects, which is already over 60% pre-leased. The Houston region will continue to be a bright spot in the quarters ahead as jobs and growth continue to attract all ages to move to Houston or one of its many suburban master-planned communities. Houstona€™s retail sector remains optimistic due to its location, strong population, household growth, and affordability.

The Houston Industrial market continues to be a hot commodity. As Houston continues to expand in many submarkets across Houston, tenant demand for industrial space is increasing. The market only has a 5.6% vacancy and is ranked in the top three major metro areas in the US for its 12-month total positive industrial space absorption of 28.3 million SF. Houston is the 6th largest industrial market in the US and the 5th largest major market with new product under construction with over 300 buildings that will add 36.5 million SF to the marketplace. The drivers behind this absorption are the port of Houston, development in e-commerce, logistics and transportation operators, accompanied by a substantial manufacturing region and petrochemical industry. Therefore, the Houston industrial tenant base has become more diverse than ever before.

The Houston office market continues to add new buildings while struggling to lease vintage products. In 1Q23 the vacancy rate remained unchanged from 4Q22 at 18.8%, causing Houston to keep its record of highest vacancy in the nation among major markets, but interestingly is the 8th largest market for new construction with over 108 new office buildings under construction totaling 5,164,000 SF. Houston is the 7th largest US office market with 350 million SF, but the Houston market has struggled to breathe new life into its older buildings as new companies are drawn to its new, LEED and green properties with state-of-the-art amenities and modern, fresh designs. Houston continues to grow and its higher quality properties classed as trophy and class A+, continue to outperform the wider market evidenced by the pre-leasing strength of new buildings under construction at 63.9% before the doors are even opened.