Quarterly Snapshot 1Q26 | Retail | Houston Retail Demand Continues to Outpace Expectations
Houston's retail leasing bounced back in early 2026, with first-quarter activity estimated at 2.8 million SF more than 25% above the pre-pandemic average driven heavily by high-growth suburban corridors like Montgomery County, Katy, and Bridgeland. However, the market is increasingly two-tiered: fitness, experiential entertainment, off-price, and grocery tenants are actively expanding and backfilling former big-box spaces, while food-and-beverage and discretionary retailers are pulling back. Elevated tenant churn remains a challenge, with move-outs averaging 3.2 million SF per quarter for eight consecutive quarters, the highest sustained pace since 2018.