Additionally, in the last quarter, according to Richard Zigler, O'Connor's director of research, the expansions these projects entailed have assisted in achieving 418,598-sf in retail absorption. Examples of this, says Zigler, are the new prototype Lord & Taylor store added at Memorial City Mall in addition to the new Dillard's and Foley's moving into the project. Additionally, the Galleria has added more than 70 new stores in its massive 700,000-sf expansion including popular retailer Nordstroms. Highland Village brought a multi-level, massive Crate & Barrel store as well as other new retailers.
While absorption levels remain high, both occupancy and rental rates have decreased slightly, according to the report. Overall occupancy is down over the last two quarters. The rate fell 0.32 points in the third quarter to 85.69%.
Houston's rental rates also fell for the third straight quarter. The rate dropped a penny per sf to $1.46 per sf.
Zigler is quick to point out, however, that although occupancies and rental rates have continued to drop this year, the decreases have been minor. "The big story is the buoyancy of the market," he says.
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