According to a yearend report by Dallas-based Weitzman Group,the region's inventory has hit 132 million sf, with 4.6 million sfunder construction. In 2006, four million sf was added. Researcherssay this year's construction pipeline is due to regional projectsand shopping center expansions.

|

Lyle Cowand, senior vice president with Weitzman's Houstonoffice, says local brokers are bracing for construction to reachnearly five million sf before the year is done. He says much of thenew product will be grocery-anchored neighborhood centers, big-boxretailers and junior anchors.

|

Cowand predicts the extra space will mean occupancy won't budgetoo much from it current figure. "With five million sf of spacecoming on line, I don't anticipate rents up-ticking much, if atall," he says. The region's average rent isn't available.

|

Lance Gilliam, managing director with Moody Rambin Interests inHouston, says overbuilding could come from unanchored strip centersin the 10,000-sf to 40,000-sf range. "It's remarkable to me how wecontinue to see these strip centers, in many cases, mid-block,being built," he says. "Those are what concern me. There's a realpotential for overbuilding there if we haven't already enteredthat."

|

Gilliam also acknowledges that retailers are pulling back alittle from committing to new projects although Houstonfundamentals are far better than those in other parts of thenation. "Across the board, we're seeing retailers becoming morethoughtful and deliberate in their decisions. And in many cases,pulling back," he tells GlobeSt.com. "It's affecting us as ownersas well--projects that were 2008 projects are now going to 2009,those scheduled to come up in 2009 are delayed until 2010."

|

Both brokers believe the continued strong housing market willhelp to protect Houston's retail market from suffering the samefate as other areas of the country. "When you look at our economy,housing market and job market compared to other major markets inthe US, we're doing very well," Cowand says. "The housing market isa big driver of retail demand and retail sales."

|

While Gilliand also is optimistic about the continued strongfundamentals, he says things are slowing down somewhat. "Like therest of the country, we built at a rapid pace over the past severalyears so we're slowing down a little," he adds, "but a little bitof cooling off isn't necessarily bad."

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.