IRR 2016: Houston retail to stay in high demand

​​​HOUSTON – Despite weaker economic condition across Houston MSA, the retail sector is booming.

Pent up demand over the last year has caused rents to increase, vacancy rates are decreasing, and construction continues full steam ahead. Retail continues to boom outside the city core and primarily is following the expansion and growth of US 99 also known as the Grand Parkway.

The Houston MSA surpassed 2014 sales volume within the first three quarters of 2015. By year-end 2014 Houston reached $1.44 billion in sales; on the other hand, 3Q2015 topped out at $1.40 billion.

With this large amount of sales volume, the market has, over the last 18 months, experienced a lot of capital chasing retail.

Fidelis Realty Partners had the most significant retail purchase over the past 12 months. Fidelis purchased the 1.2 million-sf San Jacinto Mall. Located in the Channelview/Beaumont submarket, San Jacinto Mall will be redeveloped by Fidelis to a more open-air concept to help entice new tenants and continue growth.

The outlook for Houston retail is strong. Focus on grocery-anchored shopping center and mixed-use development will continue to be seen. 

Retail will be in high demand throughout 2016 even with the oil price decline.