globe retail outlook data

 

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Retail By City

city rank #37

City Overview

As the fourth most populous city in the United States, Houston is a diverse, business-friendly metro with a dynamic mix of talent and commerce that makes it a world-class city.  Houston offers a richly-diverse pool of highly skilled, multilingual, multicultural workers. Around 35% of all adults have completed four years of college, surpassing the national average, while the median age is three years younger than the national average. Approximately 145 languages are spoken around the city, and nearly one in four Houstonians are foreign born. The Houston MSA added more than 94,000 new residents in 2017, the second highest growth rate in the nation. The metro population is anticipated to break 7 million by 2018, and according to Moody’s Analytics, the Houston metro area population will reach 12.8 million by 2045 setting the stage for an even larger consumer base.

 

Houston’s employment base has become increasingly diverse. In 1981, the economy was dominated by energy-related businesses, which held a largely disproportionate share of professional employment. Today nearly half of all jobs are in non-energy fields, such as business services, technology, aerospace, medicine and manufacturing. Overall, the outlook for Houston remains positive, with the worst of the 2015 to 2016 energy crunch now behind us.  In fact, stabilizing oil prices and recent economic indicators reported by the Dallas Federal Reserve show the worst of the downturn is behind Houston and recovery has begun.  Forecasts show the Houston area could add as many as 80,500 new jobs in 2018, with the highest gains in healthcare, hospitality and leisure, government, retail, and manufacturing.  The Texas Medical Center, now with the $1.5B TMC 3 underway, is the largest medical complex in the world, boasting over 106,000 employees and 10 million patient visits per year. Analysts at Forbes expect Houston will continue to grow as one of the nation’s most prosperous cities over the next ten years—an outlook that is mirrored locally in Houstonians’ renowned optimism where nearly 90% recently agreed with the statement that; “If you work hard in this city, eventually you will succeed.” Houston’s work ethic—and its commercial real estate market—will remain alive, well, and flourishing.

 

The Houston MSA retail market includes almost 300 million sq. ft. of retail space spread across 9,444 square miles - an area larger than the state of New Jersey.  The sprawling city supports mostly suburban retail centers dominated by grocery-anchored centers. The largest retail destination is The Galleria which serves 35 million shoppers annually and averages sales of $1,100 PSF. Houston’s spoke and wheel layout has led to an inner core encircled by the Interstate 610 Loop and is defined by an urban, dense, and pockets of affluent population.  Development sites and residential real estate within the Interstate 610 “Inner Loop” command the highest prices in the Houston area, particularly in the Rice Village and River Oaks trade areas. However, major suburban markets are important retail destinations as well serving the furthest suburban populations including The Woodlands and Katy trade areas.

 

Fundamentals in the Houston retail market are as strong as they’ve ever been. Currently at 94.1%, Houston retail occupancy is well above the 15-year average of 90.3%. The previous peak in occupancy was 92.2% in 1995. While high-profile bankruptcies of big-box retailers have monopolized industry headlines, the data for Houston’s brick-and-mortar retail space tells a very different story. Rents are on the rise and there are over 3.7 million sq. ft. under construction, as developers rush to keep up with demand.

Things to do

See

Work

Central Business District, Galleria Area, Energy Corridor, The Woodlands, Texas Medical Center


Rest

Buffalo Bayou Park, Discovery Green, Galveston Island, Hermann Park, Memorial Park, Museum District


And be seen

Eat

Peli Peli, State of Grace, Kitchen 713, Lee's Fried Chicken & Donuts, Tacodeli, Killen's Barbecue, B & B Butchers


Drink

King's BierHaus, Kirby Ice House, Anvil Bar & Refuge,  Better Luck Tomorrow, Yauatch


Be Merry

White Oak Music Hall, Clé, Minute Maid Park, House of Blues, Houston Livestock Show and Rodeo