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Houston Retail Market Report | Q2 2025

Rezul News/10709749
HOUSTON - Rezul -- "Houston ranks among the nation's top retail construction markets in the nation, with new deliveries jumping nearly 38% quarter over quarter.

While retail investment sales have dipped, price per square foot climbed year over year, and leasing activity showed marginal growth from the previous quarter."

Danny Rice | President

Key Takeaways
  • Deliveries climb
  • Leasing activity up
  • Rental rates softened
  • Absorption declines

Houston Highlights

Houston's retail market showed mixed fundamentals in Q2 2025 as new supply outpaced demand. Deliveries rose 37.9% quarter over quarter and 7.3% year over year, while net absorption dropped to a record-level 38,029 SF as active retailers balanced new leases with store closures. The Northwest submarket stood out, posting positive absorption for both the quarter and year, along with more than 500,000 SF each in deliveries and construction. Overall vacancy rose 20 basis points to 5.7%, extending a gradual two-year upward trend. Available sublease space tightened 6.8% from last quarter to 449,370 SF, though up 2.3% year over year. Houston remains one of the nation's top retail construction markets, with 3.6M SF underway despite a slight decline from last quarter and last year. The average rental rate dipped slightly to $20.27 PSF, down modestly from the previous quarter and year. Retail sales activity continued on a downward trend overall but the average sales price PSF of $339.30 is up 25.5% from a year ago. Leasing activity reached 1.9M SF, gaining 3.0% quarter over quarter but down 20.4% from a year ago. Notable second-quarter deliveries included a 203,790-SF Walmart in Bridgeland and a 94,000-SF Lowe's in Montgomery County.

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Read the full report at colliers.com/houstonresearch

Source: Colliers Houston
Filed Under: Real Estate

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