Lower Oil Prices Pump Retail Sales to New Highs

As uncertainty exists in some energy-related office assets, many investors are turning their sights to Houston’s retail industry. We more than doubled our Q1 retail sales volume from 2014 to 2015, HFF managing director Ryan West tells us. And 2015 will be the new high-water mark for sales.

Ryan says he’s never seen so much activity in Houston retail. In Q1 2014, $340M of retail (only counting deals over $2.5M) traded across the metro. This past quarter, we sold $716M. Ryan (here with daughter Addi James) says the huge boost is largely thanks to higher price points—Q1 ’15 only had 10 more transactions than Q1 ’14. Increased demand has pushed cap rates down at least 50 bps over last year. He tells us some of his best deals have been Sprouts-anchored; he and teammate Rusty Tamlyn have sold four of the six Houston stores in the last 12 months. They attract a lot of bids because Houston has so few grocery-anchored sales.

Ryan and colleagues Matt Berry and Robbie Kilcrease just closed the Pines of Louetta (pictured), a 37k SF shopping center that received offers within days of hitting the market. Houston’s retail pipeline is strong for the rest of the year, too; Ryan expects some larger, higher-profile assets to trade by year-end. He’s also wrapping up the sales of Yale Street Market (another Sprouts deal), 3939 Washington and Palmer Plaza.

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Related Topics: HFF , HFF Houston , Investment Sales , Ryan West
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