ICOnic News | Retail Third in US Metro Market | Nov 2022
HOUSTON RETAIL THIRD IN THE US METRO MARKET
Houston has made a great retail recovery since the pandemic due to increased consumer demand, 3.8% rent growth and 5.0% vacancy, making the Houston retail market rank #3 out of all the US metro markets. Even with increased inflation, statistics show 4.8 million SF of space has been absorbed and 2.1 million SF of new construction delivered in the last 12 months. If a business is looking for retail space in the suburbs, it can be difficult to find a "good" location with strong demographics to meet their needs.
Urban markets, multi-family and mixed-use developments are creating a niche for unique retail opportunities including concepts such as indoor golf putting, pickleball and vibe dining. Suburban markets, on the other hand, are benefiting from fast population growth since retail, of course, follows rooftops.
With strong leasing and limited space availability, retail investments are experiencing higher sales prices and declining cap rates (5.9% average), creating higher returns for sellers. In the current market, buyers need to be prepared to make a realistic offer or find themselves losing opportunities. Retail sales have continued to increase over the last couple months, but primarily because inflation is driving up prices. We are interested to see how 1Q2023 will position the retail market for the rest of 2023.
As we reflect on this past year and all that we are grateful for, our wonderful clients, colleagues and friends come to mind. With all the changes that are happening in the economy, we are focused on relationships now more than ever. We look forward to continue working together and achieving the goals set before us.
We hope the Thanksgiving season brings you and yours good health, prosperity, happiness, and love.
