Quarterly Market Report: Houston Retail - Q3 2019
Quarterly Market Report: Houston Retail - Q3 2019
Quarterly Market Report: Houston Retail - Q3 2019
Millions (SF)
Steady Houston retail market 4.0
95%
Net absorption in the Houston retail market increased 3.5
to almost 1.3 million sq. ft. in the third quarter 94%
3.0
compared to the previous quarter at 1.2 million sq.
ft., a 3.5% increase, while leasing activity included 1.4 2.5 93%
million sq. ft. of signed deals. The overall occupancy
rate remained unchanged quarter-over-quarter at 2.0 92%
94.4%, and down only 10 basis points from this time
1.5
last year at 94.5%. The retail market saw overall 91%
average asking rates rise yet again by $0.39 per sq. ft. 1.0
quarter-over-quarter to finish at $18.38—surpassing 90%
last quarter’s all-time high—on a triple-net basis. A 0.5
rate 3.8%. The rates are not seasonally adjusted. The Construction (SF) 3,512,309 4,321,235 3,602,230
U.S. Energy Information Administration (EIA) reported
Inventory (SF) 354,978,522 353,623,947 350,504,247
that the closing spot price for a barrel of West Texas
Intermediate (WTI) averaged $56.16 per barrel during Avg Asking NNN Rent ($) 18.38 17.99 16.90
the second week of September 2019, down 18.6%
from $68.96 for the same period in 2018. Monthly WTI
prices averaged $54.81 per barrel in August 2019.
Looking ahead, the EIA forecasts WTI to average $62
per barrel in the second half of 2019 and $63 in 2020.
MARKET OVERVIEW
Balanced year-to-date supply and demand Historical Investment Trends - Sales Volume
Quarterly Volume 09/30/19: $280,437,779
The Houston retail market has absorbed 3.1 million sq. Source: Real Capital Analytics
ft. and delivered 3.4 million sq. ft. year-to-date through Quarterly Volume
Q3 2019. Of the new construction delivered so far this 2.0
year, 70% has been leased, and of the over 3.5 million
Billions ($)
1.8
sq. ft. still in the pipeline, about half has already been 1.6
spoken for. Strong population growth, above-average 1.4
job growth, and a gradually recovering energy industry 1.2
represent Houston’s solid fundamentals. The new 1.0
rooftops and jobs have driven demand for retail, which
0.8
has led to an occupancy rate at or above 94.0% for over
0.6
the last five years.
0.4
0.2
Investment Sales
0.0
Real Capital Analytics data reports quarterly retail sales Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
volume for the third quarter 2019 in the Greater Houston
area at $280.4 million, compared to the second quarter
2019 at $289.0 million, resulting in a slight quarter-over-
quarter volume change of -3.0%. The primary capital
Vacancy & Availability
composition for buyers in the third quarter of 2019 was
made up primarily of private investors at 88.0%, followed Vacant Available
12%
by institutional investors at 8.4%. For sellers, the majority
of investors were private at 75.0%, trailed by institutional
investors at 9.9%. In July, Fondren Southwest Village 10%
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HOUSTON RETAIL | Q3 2019 Quarterly Market Report
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HOUSTON RETAIL | Q3 2019 Quarterly Market Report
MARKET OVERVIEW
Submarket Stats
Houston Total 354,978,522 5.6 1,278,983 3,104,802 1,445,450 1,344,075 3,409,208 3,512,309 18.38
Inner Loop 28,886,723 4.7 133,755 351,471 100,872 169,636 381,681 776,348 27.53
North 65,019,419 5.9 316,571 822,983 220,519 284,385 580,135 997,908 15.44
Northwest 63,596,995 5.6 346,855 737,498 340,817 420,164 874,043 444,212 18.75
South 14,949,909 4.5 71,487 234,000 18,796 76,999 164,841 67,431 17.54
Southeast 55,528,883 5.5 109,102 367,950 189,622 45,657 326,416 121,246 15.80
Southwest 57,116,611 5.9 255,200 581,428 291,876 258,917 577,887 604,983 18.02
West 44,244,717 6.6 88,033 5,044 193,936 88,317 377,089 240,075 22.18
99
99
Houston Retail Submarkets
6
1. Inner Loop
59
99
290
90 2. North
90
3. Northeast
59
290
90
10
10
10
4. Northwest
Sam Houston Tollway
Westheimer
99
Tollway
West Park Houston 225
5. South
6
45
288
59
Fo
90
rt Bend Tollway
6. Southeast
7. Southwest
8. West
Information and data within this report were obtained from sources deemed to be reliable. No warranty or representation is made to guarantee its accuracy.
NAI Partners
Houston Office
1360 Post Oak Blvd., Suite 1900
Houston, TX 77056
Leta Wauson
Director of Research
tel 713 629 0500
leta.wauson@naipartners.com
www.naipartners.com tel 713 275 9618
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