HOUSTON – Local retail vacancy tightened to 5.9 percent at the end of 2021, hitting levels not seen since before the pandemic, according to NAI Partners.
Leasing activity has remained steady, recording nearly two million sf in 4Q2021. This is just above the ten-year quarterly average of 1.9 million sf.
Considering the metro delivered 3.4 million sf of retail space, has 3.7 million sf under construction, and has 7.8 million sf proposed through 2023, retail demand shows little signs of slowing down.
Local economists expect retail real estate could return to pre-pandemic levels in 2022 with factors like restaurant space in high demand. According to the Greater Houston Partnership, Texas restaurants saw operating capacity close again to 100 percent in the last two years, with positive job and population growth trends supporting such trends.
The local retail market registered positive net absorption at 1.5 million sf in 4Q2021, outpacing supply for the third consecutive quarter.
Positive trends leasing and absorption have driven retail asking triple-net rent to $19.13.
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Source: NAI Partners