Houston retail: rents rise, grocers step on the gasHouston retail: rents rise, grocers step on the gashttps://www.recenter.tamu.edu/news/newstalk-texas/?Item=53492014-01-07T08:45:00Z2014-01-07T00:00:00Z

HOUSTON - Current conditions in Houston’s retail market clearly favor the landlords. Quality space that was renting in the low $20s per sf during the downturn now commands rents in the $30s and in some cases the low $40s.

Fierce competition for quality space is particularly intense within the range of 1,500 to 3,500 sf, according to Clay Albers, retail tenant representation broker, Baker Katz.

Rents are increasing largely because of high retail occupancy, which edged up from 93.3 percent to 93.5 in the Houston MSA during second quarter 2013, according to CoStar.

Despite these positive signs, the Houston area’s older Class B and Class C retail space still suffers from considerable vacancy or requires repurposing.

Grocery stores remain the frontrunners of what new development and store openings there have been in the Houston retail market. A new 91,000-sf HEB Market opened in Conroe in May.

Value grocer ALDI entered the market with a bang, already having completed about a dozen of the 30 stores it plans for the area through 2014.

Lastly, the market is experiencing an interesting shift in the non-traditional retail segment: urgent care clinics, hospitals and other medical tenants are aggressively filling well-located retail locations.

For more sources see:
4Q 2013 Transwestern Houston Outlook (office, industrial, some retail);
2014 Integra Realty Resources;
3Q 2013 Colliers Houston retail; and
3Q 2013 NAI Houston retail

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