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Houston’s Retail Leasing Activity Nearly Doubles From 2019

The Galleria in Houston, owned by Simon Property Group.

The Houston retail market recorded 1.3M SF of leasing activity in January and February, almost double the year-to-date activity from the first two months of 2019, according to new data from NAI Partners.

The monthly snapshot report showed that retail leasing activity rose from 572K SF in February 2019 to 1.3M SF in February 2020. That activity included both new leases and renewals.

Net absorption stood at 682K SF, a huge boost from the 78K SF of negative net absorption in January and February 2019. Occupancy stood at 94.2% in February, down 20 basis points from last year.

About 982K SF of retail space delivered in Houston in the first two months of 2020, 71% of which is already occupied. There is 3.1M SF of retail under construction in Houston, 66% of which is released. That pipeline — all scheduled to deliver this year — is an 18.2% decrease from this point last year.

The report noted that the average asking rate of retail space in Houston was $17.94 per SF on a triple net basis in February, up 1.5% from the same month in 2019.

Due to the coronavirus outbreak and advice from public health officials, The Galleria Mall, Katy Mills Mall, Houston Premium Outlets and Memorial City Mall have all announced temporary closures. That has impacted nearly 6M SF of retail space in the Houston area, the report said.