Richard Zigler, director of research for O'Connor, tells GlobeSt.com that a poll of Houston's top retail brokers revealed that investment sales remain high. Zigler says the retail landscape is like a "Christmas afternoon littered with shiny new toys and lots of empty boxes."

The new toys are the nearly 8.5 million sf of new retail space that was developed in 2002 and the over four million sf currently under construction. The empty boxes are all of the big box closings. While most of the Albertson's vacancies are now filled, Zigler predicts that some of the big boxes left empty by retailers like Builders Square and K-mart may sit empty for years or be demolished. Additionally, he predicts that the biggest semi-empty box of all, Town & Country Mall, may not even be a mall by this time next year, as anchors like Dillard's have begun leaving the property.

Overall retail occupancy is hovering in the mid-80% range, while overall rents, which haven't changed by more than a penny in three years, are still around $1.45 per sf. Retail absorption remains positive at over one million sf absorbed thus far this year. Zigler warns, however, that the K-Mart vacancies may affect that number later this year when they hit the market.

In terms of submarkets, Zigler says the "suburban frontier" markets such as Pearland, the Woodlands, Fort Bend County and Katy continue to be concentration points for new construction as they follow the tremendous boom of residential development in those areas.