HOUSTON--The Houston retail market ended the first quarter with a vacancy rate of 11.3 percent, down from the previous quarter's rate of 11.6 percent and decreased from the rate one year ago (11.8 percent), according to a report from Savills Studley.

Neighborhood shopping centers reported a vacancy rate of 13.5 percent for the quarter, which decreased from the rate of 14.1 percent 12 months ago. Community shopping centers reported a vacancy rate of 8.5 percent for the quarter, which decreased from the rate of 9.1 percent 12 months ago.

Rental rates for the Houston retail market ended the quarter averaging $17.14 per square foot NNN, which increased from the previous quarter's rate of $17.01 per square foot NNN and increased from last year's rate of $16.65 per square foot NNN. Rental rates for neighborhood shopping centers ($15.64 per square foot NNN) posted an increase relative to last year's average rate of $15.16 per square foot NNN, while community shopping centers reported an increase from the previous year's rate of $18.47 per square foot NNN, ending the quarter at $18.96 per square foot NNN.

“Leasing activity is still not quite robust enough to result in a ton of new development, but the number of new projects is still up significantly from four years ago,” Kyle R. Miller, corporate managing director at Savills Studley, told GlobeSt.com. “And with leases being signed faster and financing easier to obtain, the development cycle has become shorter.”

At the same time, “you are not seeing an explosion,” Miller added. “You just start noticing new development.”