Latest Insights

Houston's retail leasing bounced back in early 2026, with first-quarter activity estimated at 2.8 million SF more than 25% above the pre-pandemic average driven heavily by high-growth suburban corridors like Montgomery County, Katy, and Bridgeland. However, the market is increasingly two-tiered: fitness, experiential entertainment, off-price, and grocery tenants are actively expanding and backfilling former big-box spaces, while food-and-beverage and discretionary retailers are pulling back. Elevated tenant churn remains a challenge, with move-outs averaging 3.2 million SF per quarter for eight consecutive quarters, the highest sustained pace since 2018.

The Houston retail market ended 4Q25 in a stable position, supported by limited new supply and steady demand for well-located properties. The vacancy rate remained close to 5.2%, while construction activity declined significantly, with 450,000 SF delivered in the quarter and approximately 2.6 million SF completed for the year, which is well below recent averages. Net absorption remained positive at just over 500,000 SF, although leasing activity slowed as retailers grew more selective amid economic uncertainty. Asking rents rose slightly to approximately $24.57 PSF NNN, driven by limited supply and continued demand from essential and service-oriented retail. Overall, market fundamentals suggest a stable outlook, particularly for high-quality centers with strong tenant mixes.

The Houston retail market continued to perform steadily in 3Q25, supported by ongoing population growth and consistent consumer activity. Vacancy remained in the mid-5% range, signaling balanced supply and demand, while net absorption exceeded 800,000 SF for the quarter. New construction deliveries slowed to approximately 700,000 SF and the development pipeline contracted, helping preserve occupancy and mitigate oversupply concerns. Asking rents held firm on average at $24 pSF NNN throughout the Houston region, with modern, well-located centers commanding premium rates. Overall, Houston's retail sector remains well-positioned, driven by strong leasing momentum, disciplined development, and resilient consumer fundamentals.