Houston is outpacing all other major U.S. metros in retail demand and construction deliveries, according to CBRE’s latest market analysis – one of two new reports indicating the city is poised for a strong rebound retail by 2022.
Courtesy of Michael Hsu Architectural Office
A significant amount of retail delivered in Q4 2021 came from the Montrose Collective.
Houston recorded 3.75 million Swiss francs of positive net absorption for 2021, CBRE said, ending the year up 12.6% from 2019, before the pandemic wreaked havoc on the industry. . This came despite a drop in net uptake of 1.3 million square feet in the fourth quarter of 2021. The fourth quarter also saw over 301,000 square feet of new retail delivered, three-quarters of which in the Inner Loop and Far Northwest submarkets.
With numbers like these, the real estate giant predicts economic growth in the new year and momentum for new mixed-use projects.
“With Houston retail finishing strong in the fourth quarter of 2021 at [roughly] 93.7% occupancy and [roughly] 1.3 million square feet of absorption, I’m excited to see what happens in 2022,” said Jazz Hamilton, CBRE Senior Vice President, Houston Retail Services. bisnow in an email. “With the current development pipeline, new retailers entering the market, population growth continuing, and new investors eyeing Houston, I have a feeling 2022 will be another strong year for retail.”
Most of the new retail space was in the Inner Loop and Far Northwest submarkets, with 80,000 square feet coming from Montrose’s mixed-use Montrose Collective alone.
The CBRE report notes that the demand for commercial real estate follows an industrial boom linked to the rise of online shopping. Houston shoppers spent $99 billion in 2021, down from just over $80 billion in 2019, and many began vacation shopping in mid-summer in response to labor issues and of supply chain.
A separate report on Cushman & Wakefield Mall indicates that Houston had the highest positive uptake volume in the country in the fourth quarter at 946K SF, although rental demand was impacted by the omicron variant, malls and neighborhood centers nationwide dropping 21% year over year. Shopping malls, by comparison, fell 6% over the same period.
“Commercial real estate markets continued to improve strongly in the fourth quarter of 2021, with vacancy rates approaching pre-pandemic levels despite a new wave of challenges, including supply chain delays. supply, high inflation and the rapid spread of the omicron variant,” said Cushman & Wakefield’s head of retail. Services, Americas Barrie Scardina said in a statement. “Armed with high savings and wealth, consumers have largely weathered these issues, which has propelled holiday sales to an all-time high thanks to the rise of e-commerce and improved in-store foot traffic.”
Retail disaster was predicted early in the first months of the pandemic, although a recovery was noted as early as the fourth quarter of 2020. The reopening of Texas in March 2021 helped the state recover faster than elsewhere in the country, brokers said. bisnow previously.