TEXAS SNAPSHOT, MARCH 2009

Houston Retail Market

Two major trends negatively affecting the retail market in Houston at the present time include lifestyle tenants not doing deals and retailers closing their stores.

On the upside, local tenants are expanding because they are able to obtain favorable lease terms.

With the credit market being basically non-existent, tenant buildouts and new developments have been impacted greatly in Houston’s retail market.

“No significant projects are planned,” says Simmi Jaggi, first vice president with CB Richard Ellis (CBRE) in Houston’s Galleria office. “The majority of significant projects planned or under way have either halted construction, been postponed indefinitely, downsized or cancelled altogether.”

“The Houston market is very stagnant, and everyone is in a ‘wait-and-see’ holding pattern,” adds Elizabeth Clampitt, senior associate in the same office. “There is a great deal of uncertainty in the marketplace with tenants, landlords and lenders, which has created a sense of fear in moving forward with any deals.”

However, Houston submarkets that are more insulated from the current recession, such as the Texas Medical Center area and inside the loop, continue to see demand for retail.

— Simmi Jaggi is first vice president and Elizabeth Clampitt is senior associate in CB Richard Ellis’ Houston Galleria office.

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