Market fundamentals. Occupancy is at 94.2% as of February 2020, down 20 basis points from this time last year. Of the 3.1 million sq. ft. currently under construction, the availability rate stands at 34%. The Houston retail market has recorded 1.3 million sq. ft. of leasing activity—which is comprised of both new leases and renewals—a total that was almost double year-to-date activity from one year ago. In addition, the net amount of square feet absorbed stands at 682,000 sq. ft., with new supply delivering 982,000 sq. ft. to the market this year, of which 71% is occupied. The rising average asking rate of renting retail space in Houston is at $17.94 per sq. ft. on a triple net basis, up 1.5% from this time in 2019 at $17.68 per sq. ft.

Slowing the spread. As public health officials advise social distancing to slow the spread of the coronavirus, The Galleria Mall, Katy Mills Mall, Houston Premium Outlets and Memorial City Mall have all announced temporary closures, impacting nearly 6 million sq. ft. of retail space in the Houston area. In addition, corporate companies are adhering to the closings as Texas Gov. Greg Abbott banned group gatherings of more than 10 people in line with federal recommendations. Abbott also ordered the closing of restaurants, bars, food courts and gyms statewide until April 3.

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