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Q3 2021 | Houston Retail Market Report

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 “Houston’s retail market remains one of the more active
sectors in the country and demand is starting to quickly
outpace the supply of quality space.”
Wade H Greene IV, CCIM | Principal |Director of Retail Services | Houston


Key Takeaways

  • Houston’s population growth caused increasing demand
  • Vacancy remained low
  • Positive absorption recorded
  • Rental rates increased
  • Leasing activity up 37 percent
  2021_Q3_Retail_Vacancy Rate   2021_Q3_Retail_Net Absorption 
   2021_Q3_Retail_Under Construction    2021_Q3_Retail_Lease Rates


Houston Highlights

Houston’s vacancy rate decreased 20 basis points from 5.9% to 5.7% over the quarter as more inventory was leased than new inventory delivered. Houston’s retail sector recorded 671,400 square fee of positive net absorption in the third quarter. Leasing activity increased 37 percent between quarters recording over 1.5 million square feet in Q3. According to the U.S. Bureau of Labor Statistics (BLS), Houston’s Retail Trade employment sector increased 1.4% and the Clothing and Clothing Accessories Stores sub-sector increased 9.7% between August 2020 and August 2021.

Market Indicators

2021_Q3_Retail_Market Indicators 

Historic Comparison

2021_Q3_Retail_Historic Comparison 


Market Fundamentals

2021_Q3_Retail_Market Fundamentals 

The forecast in the above graph is based on a trailing 4-quarter average.
*The average asking rents in the table to the left are an average of all property types that are currently listed with an asking rate. This average does not include properties that are fully leased or that do not list an asking rate.

Recent Transactions

  2021_Q3_Retail_Recent Transactions_1   
   2021_Q3_Retail_Recent Transactions_2  


Executive Summary

Commentary By Cody Persyn | Senior Vice President & Wade H. Greene IV, CCIM | Principal

Retailers Brace for Strong Holiday Season, but New Challenges Loom

Following the roller coaster year that was 2020, retailers have found themselves in a much brighter situation than forecasted. For the first time in years, new brick and mortar openings are outpacing store closures. Retailers are also enjoying sales increases both instore and online in 2021. Including the highest ever instore retail sales increase during the second quarter of 2021.

However, with inflation, hiring challenges and supply chain disruptions going into the holiday season, retailers find themselves once again having to evolve, adapt and find solutions to difficult questions. Will shipments arrive to fill the shelves? Will workers be available when needed most? How will consumers respond to increasing prices?

Academics love the case studies that are becoming realized daily, but the real world does not. Supply chain bottlenecks have made all the headlines. In late September, news sources reported that an estimated 500,000 containers were waiting in line at the Port of Los Angeles and Long Beach. Additionally
in October, news sources reported that Walmart, Target, Costco and Home Depot have reached the point of actually chartering ships so they have more control over the arrival of their products. Other retailers simply have to wait as ships are redirected to other ports or delayed.

The U.S. Federal Reserve Bank forecasts tempered inflation, but this is difficult to believe the way prices have been rising in Houston and across the nation. Retailers have increased wages considerably over the past years simply to retain workers. Increased labor expense directly influences price levels. Commodities are at multi-year highs. What’s more, the last dollar store holdout to actually sell products at $1 each, Dollar Tree, has recently announced increases to $1.25 and $1.50. Will inflation ebb or continue to diminish buying power?

The flip side is that some of these “problems” are the result of good things. The almighty American consumer has not been deterred. This was evidenced by an increase in consumer spending of 0.8% in August after a 0.1% increase in July according to the Bureau of Economic Analysis. ICSC, a major trade group for the retail real estate industry, shared the results of their annual Holiday Shopping Intentions Survey on October 12th. Their survey forecasts an increase of roughly 9% on holiday spending this year, with 78% of shoppers anticipating spending the same or more. While the death of physical retail has been widely speculated following the rise of e-commerce, ICSC’s survey found 85% of shoppers plan to spend money in physical stores. And will consumers have fun while shopping? It certainly seems that way with food and beverage establishments expecting 35.4% year-over-year growth according to ICSC.

More questions than answers…and seeing how this holiday season proves out is sure to be interesting. Will consumers buy today because it will cost more tomorrow? Buy today because it won’t be on the shelf tomorrow? Will clinically diagnosed procrastinators stick to their guns and wait until the week before Christmas to shop? Or, will they take the widely recommended advice to start shopping early this year? Time will tell, but planning ahead may be wise to avoid stuffing stockings with a wide assortment of gift cards, IOUs, or tracking numbers.

   Image 1  Rendering  

Colliers awarded leasing assignment for the upcoming Katy Boardwalk District

The Katy Boardwalk District will be a true “third place” for local residents, a place outside of the home and office where they seek relaxation, entertainment and new experiences. The district’s retail mix, amenities and dining and entertainment options will draw the well-educated and well-traveled from Katy, the greater Houston area and beyond. This mixed-used project will engage visitors by fusing the best in live music, homegrown restaurants and new-to-town retailers, flavors and experiences.



Q3 2021 | Houston Retail Market Report

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Related Experts

Lisa Bridges

Director of Market Research


Lisa joined Colliers in 2010 as Director of Market Research and has 37 years of commercial real estate experience. Lisa initiates proactive market research projects to further the business goals of the company. She writes and prepares 29 market reports annually, including quarterly reports on Houston's retail, office, industrial and healthcare properties.  Further, she prepares statistical ownership reports for various clients as well as an annual Houston Economic Overview. Lisa also creates PowerPoint market presentations, trade journal articles, and other marketing materials supporting the company's business endeavors. She works with senior management in planning the company's marketing strategy and public relations support for local and national conferences, luncheon meetings, recruitment programs, and special events.  Lisa works closely with the company's brokers to develop effective custom market research material specific to existing and potential clients.

Lisa serves on the Colliers Editorial Board, the Colliers U.S. Research Council, and is a recipient of the Colliers Researcher of the Year Award.

Lisa earned the Commercial Property Research Certification (CPRC) from Colliers University.  CPRC is the first and only accreditation for commercial real estate research professionals. It offers a professional development path to increase strategic and tactical expertise in marketing/research, knowledge of the industry and capabilities with commercial real estate tools.

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Wade Greene

Principal & Director


Wade Greene joins Colliers Houston as Director of Retail Services and Principal of the company.  Greene will use his experience and enthusiasm for retail brokerage to grow the Colliers Houston Retail and Hospitality Advisory Teams.  

Wade specializes in tenant representation services for local and national restaurant, retail, and entertainment concepts.  With the assistance of C-Suite level clients and his national brokerage network, Mr. Greene has built a Corporate and Franchise Growth Solutions Platform, helping companies seamlessly execute driven roll outs across the country. 

A native Houstonian and second-generation Houston based commercial real estate professional, Wade has represented companies such as, Alamo Drafthouse Cinemas, Walmart, Salata, Kids Empire, Darden Restaurants, Earl of Sandwich, Putt Shack, Flight Club, Ace Bounce, Seoul Taco, Tasc Performance Apparel, Krewe Optical, Chick’n Cone, Firehouse Subs, Voodoo Doughnut, Jollibee, Roses, Anytime Fitness, Dat Dog, Dyson and Award-Winning Texas Chefs.     

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Cody Persyn

Senior Vice President


Cody Persyn advises clients in the buying and selling of investment and value-add retail properties, tenant representation and site selection. His attention to detail and beginnings as a financial analyst help ensure clients are maximizing value. Cody has been involved in the transaction side of the business since 2001, handling multi-tenant and single tenant (NNN) sales, sale-leasebacks and corporate dispositions. He has formed a specific expertise in the disposition of vacant retail “big box” properties with involvement in 291 transactions with consideration exceeding $687 million. He has sold properties in 44 states.

Prior to joining Colliers in 2021, Cody spent eight years with SRS following 12 years with the Portfolio Services team of CBRE. During his career he has worked with industry leaders including Walmart Realty, Walgreens, Shell Oil Company, America’s Best Contacts & Eyeglasses, AutoNation, YUM! Brands, Capital Automotive and Inland Real Estate Group.

Cody is a graduate of the Mays Business School at Texas A&M University with a Master of Real Estate in Land Economics and Real Estate, where he also completed his undergraduate degree. During his time in college he also served a six-year tour in the Marine Corps Reserve.

Cody has been married to Brooke for 14 years and they have two children, Frankie and Atlee. In his spare time, Cody enjoys the great outdoors, traveling and has a particular interest in most things about Spain.

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