HOUSTON–CBRE‘s Matt Keener, senior vice president of retail brokerage, shared his thoughts on the current Houston retail market as well as where the market was and where it is headed in the years ahead.
GlobeSt.com: What do you think will be some of the major retail trends in 2014?
Keener: Contraction of footprint size in retailers, consolidation of similar concepts (such as Office Depot and OfficeMax), and closure of poorly performing units and concepts.
GlobeSt.com: How would you say the retail market has changed over the last five years?
Keener: The retail market has shifted from being a tenant-driven market with an excess of supply to a supply-constrained, landlord-driven market. Retailers that find themselves in the “middle” of the discount and luxury categories are being squeezed as consumers move more to either end of the pricing spectrum.
GlobeSt.com: Is there are particular project that you are watching with a lot of interest?
Keener: We are closely watching the River Oaks District as many high-end retailers begin to move into the area.
GlobeSt.com: A number of professionals in the industry have mentioned retails switch to these urban lifestyle centers – do you see this as being a major part of the retail market?
Keener: In total square footage, not really. But in overall impact and appeal, absolutely. Lifestyle centers are primarily mixed-use projects with significant residential, office and/or hospitality components that have a retail element versus a stand-alone retail shop.
GlobeSt.com: Have you seen any retailers enter Houston for the first time in recent months?
Keener: Lots of new retailers are looking, particularly numerous fast casual food and fitness or other personal services concepts.
GlobeSt.com: Where do you see the market headed?
Keener: The market is moving into a nice, manageable new development cycle, delivering approximately 2 million square feet per year to meet retailers’ stifled demand for space in various product categories.