August 12, 2014
Houston Retail Construction Doubles Over Last Year
Houston Business Journal
Houston’s retail market is thriving, and we’ve got the numbers to prove it.
For calendar year 2014, the Houston-area retail market is on track to add approximately 1.6 million square feet of space to the area based on actual and projected openings, according to Dallas-based The Weitzman Group. That’s more than double the 679,000 square feet added the previous year.
While the luxury market is heating up in Houston, the majority of the new construction is dominated by grocery-anchored projects as well as a number of mixed-use projects. Supermarkets will dominate aggressive retail development in Houston over the next year, reports Houston-based Wulfe & Co., representing half of 2014’s retail growth with 28 new grocery stores recently completed, planned or under construction.
Mid-year numbers show the overall retail occupancy rate is at 96 percent, the highest level to be reached in more than a decade, reports The Weitzman Group.
Rental rental rates are climbing, too.
In some cases, rates exceed $50 per square foot for completed projects, and the trend is likely to continue, said Eric Lestin,
executive vice president of
And in a time when enclosed-mall construction is pretty dormant in the rest of the country, Houston has the distinction of seeing two major mall expansions at Baybrook Mall, which will bring it to a total of 1.7 million square feet. It is set to open by the end of 2015. The Galleria also has seen tremendous expansion and renovation, adding new retail space.
“There is a huge demand for luxury space in Houston, and we just don’t have the supply. Now we are creating it,” Greg Noble, general manager of the Galleria, told the Houston Business Journal.
Other developments are also working on meeting the demand for luxury. Uptown Park is undergoing a $1 billion renovation, and the River Oaks District, a $275 million, 650,000-square-foot mixed-used development on Westheimer Road, is moving full-steam ahead.