According to Marcus & Millichap’s 4Q 2024 Houston Retail Market Report, the retail market in Houston has shown resilience as we approach the end of the year. This growth is primarily driven by demand in suburban areas, while urban areas are beginning to show signs of recovery. Ford Noe from Marcus & Millichap stated that this trend is reflected in their report.
The report includes data on various aspects of the retail market in Houston for Q4 2024:
– Annual inventory growth slowed down to a rate of just 0.8%, which matches the lowest rate seen since 2011. Most construction activity was concentrated outside Highway Beltway 8, particularly in southwest and northwest suburbs.
– The vacancy rate for retail space is expected to reach around at an estimated level of5.4% by year-end, reflecting an increase due to store closures within Inner Loop but still remaining below long-term average levels (6.3%).
– Despite some pressure from available big box spaces, average asking rents are projectedto rise up $20.70 per square foot on average across all typesof properties.This maintainsHouston’s strong trajectory as thesecond-fastest-growing major Texas market.
– Northwest Harris County and Montgomery County have experiencedthe largest absorption rates during this period.These were fueledby grocery stores anchoring shopping centersand lifestyle retailers expanding their footprintsto cater togrowing suburban populations.
Overall,the post-Houston Retail Rentsareon RiseasperthisreportfromMarcus&Millichapis a testamenttothe steadygrowthandresilienceofthesuburbanretailmarketinHoustonwhileurbanareasbeginningtorecover.Marcus&MillichapsuccessfullycapturedthistrendintheirlatestreportforQ42024.Houstonsurelycontinuestobeanattractivemarketforretailers,andweexpecttosseemoreretailspaceabsorptioninthecomingquarters.
