Sluggish energy prices slowed Houston's overall economy but could not stop the Bayou City's red hot retail sector. Houston's retail market concluded 2015 with an overall occupancy rate of 96%, officials with The Weitzman Group (led by CEO Marshall Mills, pictured) tell us. The firm broke down four reasons the market is so tight.
First, new retail construction has remained at historic lows, which has prevented overbuilding from taking place as it has every previous cycle.
Second, new construction was primarily driven by anchor stores. This allowed new deliveries to add to occupancy, not vacancy rates.
Third, the lack of new spec retail space prompted strong concepts, such as grocers, big-box retailers and apparel retailers, to backfill large-block vacancies throughout the city.
Fourth, the overall local economy is still a net job creator despite the oil slump and is becoming increasingly diverse, Weitzman VP Kyle Knight tells us. Also, strong population growth is creating strong demand for goods and services.
Going into 2016, even if the energy slowdown continues and the overall economy slows, Kyle tells us the market’s constrained, demand-based approach to construction means that retail balance should remain steady.
Retail's on a multi-year strong run: check out this 2014 Bisnow story about five reasons Houston's retail market rocked the previous year as well.
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