HOUSTON – Approaching 2022’s midway point, overall local retail vacancy has tightened to 5.5 percent, dropping 80 basis points from this time last year at 6.3 percent.
According to NAI Partners’ June 2022 report, availability is at 6.5 percent, down 70 basis points from 7.2 percent in May 2021. The difference between this figure and the vacancy rate reflects expected future move-outs. The first five months of the year mark the highest amount of leasing activity in January through May on record for city’s retail market since 2016. The market recorded 3.9 million sf of leasing activity (both new and renewals), while net absorption (move-ins minus move-outs) was at two million sf, almost equal year over year.
Positive trends in leasing and absorption have driven average retail asking rents higher. Houston’s NNN average asking rent is at an all-time high of $19.37 per sf, up 3.8 percent from $18.66 last year.
According to NAI’s report, “strengthened by the region’s strong demographic growth and a steady development pipeline, rent growth is expected to improve further through the near-term forecast so long as the local economic recovery continues.”