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Retail Supply Catches Up to Demand
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Following nearly three years of red-hot growth activity, Houston’s retail sector is finally starting to normalize, according to JLL’s Q1 2017 metrics. Net year-to-date absorption in Q1 stood at 628,160 square feet, out of a total inventory of 340.9 million square feet. Additionally, 2.1 million square feet is under construction, with total vacancy at 5.1%.
General retail centers demonstrated the smallest vacancy rate at 2.5%, though 1.3 million square feet is under construction in this category. Malls, in the meantime, had a 3.8% vacancy, while shopping centers, which have the most inventory, experienced negative absorption of 72,601 square feet and a vacancy rate of 7.7%.
JLL’s forecast for the next 12 months:
- deliveries will translate into increased inventory
- positive net absorption will also increase
- vacancy will remain unchanged as supply and demand re-balance
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