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Despite a slowdown in construction and new supply, Houstona€™s retail market remained active in 2024, with major retailers expanding their presence. Construction in 4Q24 dropped to its lowest post-pandemic level at 3.0 million SF, marking a 31.7% decline from the previous year. Annual absorption hit a record low of 1.8 million SF, while total deliveries for the year reached 3.2 million SF. Retail giants like Costco, HEB, and Home Depot continued growing, each adding two new locations. The vacancy rate held steady at 5.4%, slightly above last yeara€™s level. Meanwhile, rental rates rose 2.5% to $24.03 PSF, and leasing volume increased 2.4% to 8.3 million SF.

Houstona€™s retail market continued to perform strongly in 3Q24 within the city's commercial real estate landscape, fueled by ongoing population and job growth. Quarterly net deliveries have outpaced demand in five of the last six quarters, indicating a persistent supply-demand imbalance. While vacancy rates have slightly increased by 0.3% in the past few quarters, they remain relatively low overall at 5.1%. Additionally, retailers are still seeking space, although the pace of demand has slowed compared to 2023. This trend should continue in the coming quarter and into 2025.