Retail Report: Occupancy is Still Strong Despite Construction Boom

Rendering of the Buffalo Heights mixed-use project underway in the Inner Loop. 

HOUSTON – (Realty News Report) – A significant amount of retail centers, grocery stores and restaurant continue to be built in the Houston market.

But strong employment growth and low unemployment give momentum for the space to be filled in rapid order. CBRE reported the second quarter occupancy rate stands at 94.3 percent.

The tenant mix is not the same as in years past. Traditional regional malls anchored by Sears, JC Penney and Macy’s fade as new trends take hold. The evolution occurs as e-commerce applies pressure to retailers and results in closings, such as Charming Charlie’s, GNC vitamin shops, and Payless Shoes.

“We’re seeing a lot more entertainment users coming into the market,” said Lacee Jacobs, a retail specialist at CBRE. The Inner Loop of Houston is gaining a lot of new retail space and mixed-use projects, such as M-K-T in the Heights, Regents Square and Buffalo Heights.

The Weitzman company, a Texas-based firm focused on retail real estate, develop a list of new projects in 2019:

  • H-E-B in the Heights, 2300 N Shepherd Drive: The 92,000-square-foot two-story H-E-B store opened during the first half of 2019 in Houston’s urban Heights neighborhood.

  • H-E-B MacGregor Market, a 90,000-square-foot store to open in late 2019 at Highway 288 and North MacGregor Way in Houston’s Third Ward. The store will replace the area’s H-E-B location at Old Spanish Trail and Scott Street.

  • H-E-B Buffalo Heights, Washington Ave and S Heights Blvd.: This urban store should open during the second half of 2019 as part of the mixed-use Buffalo Heights project. The 96,000-square-foot store will anchor the street-level retail in the multi-family first phase of Buffalo Heights District development.

  • University Commons Phase II, US 59 and University Blvd, Sugar Land: A 109,000-square-foot expansion of the center included a 30,000-square-foot Sprouts Farmers Market that opened in early 2019.

  • Lake Woodland Crossing, Lake Woodlands Dr & Grogan’s Mill Rd, The Woodlands: The tenant mix of this approximately 63,000-square-foot center inside The Woodlands Town Center includes a 25,000-square-foot Total Wine and several others.

  • Creekside Park West, Creekside Forest Dr & W Harmony Place, The Woodlands: The first phase of the development, with the first Houston-area location for Austin-based Moviehouse & Eatery, is set for completion in late 2019.

  • Brazos Town Center, IH-69 (US-59) and FM 762, Rosenberg: The center, one of the largest non-mall centers in the Houston market, constructed a new junior anchor space for Old Navy. (12,500 SF)

  • District West, Westpark Tollway near Peek Rd, Katy: The project’s first phase includes Star Cinema Grill. Upon completion, District West could include as much as 500,000 square feet of mixed-use retail, office, healthcare and other space. (55,000 SF)

  • CityPlace at Springwoods Village, IH-45 North & Grand Pkwy, Spring: The first phase of retail space is now underway and scheduled for completion during the second half of 2019. The retail space includes Star Cinema Grill and a 38,000-square-foot 24 Hour Fitness, as well as small-shop space.

  • Cypress Marketplace, Barker Cypress Rd & US-290, Cypress: The center at the northwest corner of Barker Cypress Road and the Northwest Freeway includes an 88,000-square-foot At Home home furnishings superstore, which opened in June 2019, and a 148,000-square-foot Costco set to open during the second half of the year.

  • Katy Grand, Grand Pkwy & Katy Fwy, Katy: The center’s newest phase opened its first tenants such as 85C Bakery during the first half of 2019. The phase is joining existing anchor Cinemark. (36,000)

  • MetroPark Square, IH-45 & SH-242, Shenandoah: This mixed-use entertainment-focused project includes an AMC 10-screen cinema, opened in March 2019, and a Dave & Buster’s set to open during the second half of the year.

  • 336 Marketplace, a center located at I-45 South and S Loop 336W, which is expanding with a 45,000-square-foot Dick’s Sporting Goods set to open in late 2019.

  • American Furniture Warehouse, a large-format furniture retailer which is scheduled to open its first area location in late 2019 at IH-45 near NASA Bypass in Webster. The Webster facility will be approximately 355,000 square feet total, with a retail showroom of around 100,000 square feet.

  • Park Air 59, US-59 near Will Clayton Pkwy, Humble: This mixed-use development in Humble includes an 80,000-square-foot Floor & Décor building opening in the second half of 2019.

  • Riverstone Place Shopping Center, a 28,000-square-foot neighborhood center at University Boulevard and LJ Parkway in Sugar Land.

New Space for 2020 or later

  • H-E-B Meyerland Plaza, W Loop 610 & Beechnut Dr, Houston: A two-story Inner Loop store in the historic Meyerland Plaza, which first opened in the 1950s. The new store, set to start construction in 2019, will replace an H-E-B at Chimney Rock and South Braeswood that flooded in Hurricane Harvey.

  • M-K-T, North Shepherd St at 6th & 7th Sts., Houston: This urban redevelopment project in the Heights is designed to transform aging warehouse buildings into a 200,000-square-foot mixed-use project that will have a significant retail and restaurant component, as well as office space. The project is set for completion in 2020.

July 23, 2019 Realty News Report Copyright 2019

Retail Report: Occupancy is Still Strong Despite Construction Boom