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HOUSTON-Active expansion and major new developments among retailers like Wal-Mart, Target, Home Depot and H-E-B have helped to ensure that this year’s first half has been a strong one for development and leasing. In its latest report, the Weitzman Group team has concluded that that much of the 3.5 million sf of new space due to open before year’s end is directly tied to expansions by large-format retailers. The new space tops the three million sf of space added last year to the market.

Because of huge demand fueled by a growing population and a humming economy, rental rates have increased slightly. Inside the loop rates have topped out at $40 per sf while area-wide class A inline space is running from $21 per sf to $25 per sf. In the meantime, the overall occupancy rate of 87% is unchanged from the same period of time last year.

Leading the way for developments and openings are the Wal-Mart Supercenter stores at locations including Lake Woodlands Parkway and FM 2978; Interstate 45 and FM 646; and Wilson Road and Beltway 8. Competitor Target, in the meantime, will boast locations at Interstate 10 and Sawyer Heights and Eldridge Road and FM 1960. Home Depot and JC Penney also have multiple openings scheduled throughout the area during the remainder of the year.

While development emphasis is on major retailers and large lifestyle centers, Greg Slusky, Weitzman’s assistant vice president in Houston, tells GlobeSt.com that the neighborhood segment is undergoing as much development and attracting as much demand as power centers. “There’s still plenty of development to be had in the Houston market for the neighborhood centers,” he says, “but these centers are more dependent on strong intersections rather than just blocks of land.” Likewise, he says specialty retail like boutique stores, entertainment centers and upscale shops continue to be strong as well.

Weitzman’s research team predicts the year will continue to be strong, basing part of the forecast on single-family housing starts that are anticipated to reach 50,000 before the year ends. The jobs market is adding more fuel with experts projecting the year will top out at 70,000 new jobs in the Greater Houston metro.

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