May 22
LAS VEGAS — The Houston retail market has been strong for years now and consumers in Houston — like many parts of the country — are very resilient. As a result, Jason Baker, principal with Houston-based Baker Katz, is seeing more first-to-market retailers across a wide range of categories make their way into Texas by way of Houston.
We chatted with Baker during the ICSC Las Vegas Conference, where he said that with a mix of the lack of new construction, resulting in both elevated occupancy and rental rates, the byproduct is a highly competitive landscape.
The bottom line is that best in class operators are at the front of the line when quality vacancy does become available, he says.
When asked about conversations he anticipates here at the ICSC Las Vegas Conference that will have a direct impact on retail expansion in Houston, he said that while the headwinds in developing new retail are well documented and have been for some time now, he does anticipate some new projects coming out of the ground as the end of 2024 and early 2025 approaches. “As we look into 2026, that rate of development should pick up more meaningful steam — but that timeline could extend out even further depending upon if, or when, the Fed cuts rates.”
“While we are seeing solid activity across a wide range of retail segments, food and beverage remains the most aggressive, and we expect that will continue,” he tells GlobeSt.com. “Availability of labor in Houston is a big driver of this trend. Labor represents an increasing — and increasingly sensitive — consideration for retailers who are looking to expand, so our large labor pool is certainly a benefit of the market.
He adds that grocery and discount will also remain active, many of which are expanding throughout the country. “While we are hearing a lot of new names, we haven’t seen as many yet, likely due to to the lack of vacancy,” he says. “Without a doubt, demand continue to exceed supply in a big way.”