In greater Houston, the suburbs have been leading the region’s population growth, driven by people’s desire for more space and affordability.

This shift to the suburbs has also fueled the demand for retail outside of downtown hubs and closer to where people live, said Brandi Dees, senior vice president at CRE brokerage Lee & Associates’ Houston location. This creates the opportunity for neighborhood shopping plazas and other large mixed-use developments with shopping, dining and gathering spaces.

“There’s a huge mix of customers who are going into these retail centers during the day,” Dees said. “While it used to be mainly stay-at-home moms, they’re no longer the only demographic that is home at that time.”

Dees said that while there has always been steady commercial development in the Houston suburbs, the increase in residential development has caused retail rents to climb. Having the customer base there would justify those higher rents.

The most prominent types of retail in high-growth suburbs include grocery-anchored centers, small neighborhood retail centers, freestanding restaurants and drive-thrus. A wellness and fitness center can be a lucrative addition to the mix, she said.

A mixed-use development with retail is also a prime location for electric vehicle charging stations to serve customers who are out shopping and may need to stop and charge their cars, she said.

The north and northeast parts of the greater Houston area are gearing up for additional development. While they already have some retail assets, the services provided haven’t been meeting the demand of their growing populations, Dees said.

Some older developments have been seeing these challenges play out in real time. If retail spaces are not maintained or don't meet the needs of the neighborhood’s target audience, the older development risks losing business to the next development that comes along.

“People want the new shiny asset that’s coming in,” Dees said. “Owners should be sure to spend money on making sure the look of your center matches the aesthetics of the community to keep attracting customers and keep growing.”

Lee & Associates brokers help their developer clients with positioning their retail in the suburban communities that need them. Placer.ai is one tool that brokers can use that provides analytics, including demographic information, to help determine the best tenants for those spaces.

The platform enables brokers to gain insights into the trends of how a particular retail asset performs in other neighborhoods. If that asset was built in a community years ago, brokers can analyze how that asset impacted the community over the years up to the present day.

Dees emphasized the importance of having this collaboration between developers and brokers who are familiar with trends in the greater Houston area.

“If we can position retail into a mixed-use development well, we’re going to be able to retain the tenants and support the center’s property values,” she said. “Having a broker work with and guide the developer here is going to be so important.”

This article was produced in collaboration between Lee & Associates and Studio B. Bisnow news staff was not involved in the production of this content.

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