Accelerating success. Q1 2012 | RE TAIL MARK ET MARKET INDICATORS 1Q11 1Q12 CITYWIDE NET ABSORPTION (SF) 268k (352k) CITYWIDE AVERAGE VACANCY 7.8% 7.2% CITYWIDE AVERAGE RENTAL RATE $14.83 $14.71 DELIVERIES (SF) 49k 142k UNDER CONSTRUCTION (SF) 486k 561k 1 National and regional restaurants and grocers expand in the Houston Retail Market As Houston’s population grows so does the need for food, and national and regiona l retailers are respondi ng to this demand. In the past 15 months 450,000 square feet of new restaura nt an d gr ocery st ore spa ce has been added to Houston’s retail market. Some of the tena nts that have expand ed in Houston include Raising Cane’s, Carl’s Jr., Freddy’s Frozen Custard & Steakburgers, World of Beer, Buffalo Wild Wings, Cheddar’s, la Madeleine, Panera Bread, H.E.B., Joe V’s Smart Shop, Trader Joe’s, Whole Foods Market, and Aldi. According to numbers released by the U.S. Bureau of Labor Statistics, Houston added 12,800 retail jobs over the past year, a 4.9% growth rate. 10,000 of those jobs came from the food and bever age stores s ector. Houston’s retail market posted 352,000 square feet of negative absorption in Q1 2012 mainly due to tenants vacating older highly depreciated shopping centers. The average retail vacancy rate remained unchanged between Q4 2011 and Q1 2012 at 7.2%, but decreased from 7.8% on a year-over-year basis. The overall city wid e average rental rate decreased between qua rters; howe ver, up-s cale rental rat es increased slig htly or remaine d the same. Most of the retail growth has occurred in submarkets near and around master -pl anned resid ential neighborhoods such as Telfair, Cinco Ranch and The Woodlands. The Houston metropolitan area added 93,400 jobs between February 2011 and February 2012, a 3.7% increase. Unemploy ment fell to 7.2% from 8.4% one year ago. Houston ar ea home sales inc reased by 16.9% co mpared to February 2 011 sales. As Houston’s MSA continues to see hea lthy job growth and a stro ng housing market, Houston’s economy is expected to remain healthy for both the near and long-term. 0% 2% 4% 6% 8% 10% 12% -500,000 0 500,000 1,000,000 1,500,000 2,000,000 Absor ption New Supply Vacancy ABSORPTION, NEW SUPPLY & VACANCY RATES HOUSTON RETAIL MARKET RESEARCH & FORECAST REPORT Data source: CoStar PropertyUNEMPLOYMENT 2/11 2/12 HOUSTON 8.4% 7.2% TEXAS 8.1% 7.2% U.S. 9.5% 8.7% JOB GROWTH ANNUAL CHANGE # OF JOBS ADDED HOUSTON 3.7% 93.4k TEXAS 2.6% 266.2k U.S. 1.9% 2.6m JOB GROWTH & UNEMPLOYMENT (Not Seasonally Adjusted)
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National and regional restaurants and grocerexpand in the Houston Retail Market
As Houston’s population grows so does the need for food, and national anregional retailers are responding to this demand. In the past 15 months 450,00square feet of new restaurant and grocery store space has been added Houston’s retail market. Some of the tenants that have expanded in Houstoinclude Raising Cane’s, Carl’s Jr., Freddy’s Frozen Custard & Steakburgers, Worof Beer, Buffalo Wild Wings, Cheddar’s, la Madeleine, Panera Bread, H.E.B., JoV’s Smart Shop, Trader Joe’s, Whole Foods Market, and Aldi.
According to numbers released by the U.S. Bureau of Labor Statistics, Houstoadded 12,800 retail jobs over the past year, a 4.9% growth rate. 10,000 of thos jobs came from the food and beverage stores sector.
Houston’s retail market posted 352,000 square feet of negative absorption in Q2012 mainly due to tenants vacating older highly depreciated shopping centersThe average retail vacancy rate remained unchanged between Q4 2011 and Q2012 at 7.2%, but decreased from 7.8% on a year-over-year basis. The overacitywide average rental rate decreased between quarters; however, up-sca
rental rates increased slightly or remained the same. Most of the retail growhas occurred in submarkets near and around master-planned residentineighborhoods such as Telfair, Cinco Ranch and The Woodlands.
The Houston metropolitan area added 93,400 jobs between February 2011 anFebruary 2012, a 3.7% increase. Unemployment fell to 7.2% from 8.4% one yeago. Houston area home sales increased by 16.9% compared to February 20sales. As Houston’s MSA continues to see healthy job growth and a stronhousing market, Houston’s economy is expected to remain healthy for both thnear and long-term.