HOUSTON, Nov. 19, 2007 – Strong demand-side indicators point to a positive long-term outlook for the Houston retail market, despite an expected uptick in vacancy levels due to new stock coming online during the second half of 2007, according to a third-quarter Retail Research Report by Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm. After adding more jobs than any other metro in the country last year, employment expansion will slow to a still-strong 2.9 percent in 2007.
“The investment outlook for Houston’s retail properties will remain positive this year, as the long-term economic and demographic forecasts for the metro support future fundamental improvement,” says Michael Hoffman, regional manager of the Houston office of Marcus & Millichap.
Following are some of the most significant aspects of the Houston Retail Research Report:
- Supported by a strong energy sector, Houston’s employers are expected to add 72,100 jobs in the metro this year, boosting employment 2.9 percent.
- Retail construction is accelerating in Houston this year, as developers are forecast to expand retail stock 2.6 percent with the addition of 4.6 million square feet.
- Vacancy is forecast to end the year at 11.5 percent.
- Metrowide asking rents are expected to inch up 2.8 percent to $15.87 per square foot as new projects are completed this year. Effective rents will also post gains, growing 2.6 percent to $14.17 per square foot by year-end 2007.
- During the last year, the median sales price has climbed 59 percent to $284 per square foot, as investors have shifted their focus to high-priced fast-food properties and traditional restaurants.
For a copy of the complete Houston Retail Research Report, as well as reports on other markets nationwide, visit our website at www.MarcusMillichap.com.
With more than 1,300 investment professionals in offices nationwide, Encino, Calif.-based Marcus & Millichap Real Estate Investment Services is the largest commercial real estate brokerage in the nation focusing exclusively on real estate investments. In 2006, the firm closed $20.5 billion in transactions. Founded in 1971, the firm has perfected a powerful system for marketing properties that combines product specialization; local market expertise; the industry’s most comprehensive research and analysis capabilities; state-of-the-art technology; and established relationships with the largest pool of qualified investors nationally.