Houston is America’s 4th largest city. It is better known for its association with oil, but in recent years the city has diversified to become a leading educational, financial, medical and retail center. Today, the retail property market in Houston is generally strong all over the city – including downtown, the suburbs and surrounding area.
There are several reasons for the strong retail property market in Houston. The city has seen steady job growth as well as expansion of its port facilities and substantial investment in major highway projects. Commercial and residential construction has also been strong over the last few years. And Houston has no zoning laws, which generally makes it easier for developers to build in just the right place.
The average occupancy rate of Houston retail centers hovers around 85% – shopping centers built since 1990 tend to have a slightly higher rate than those built prior to that year. Newer shopping centers are generally better designed, offer better parking and are generally more appealing to both potential tenants and shoppers. Rental rates in the Houston retail property market average around $ 1.50 per square foot.
Planned communities, such as Sugar Land in the Southwest and the Woodlands to the north have been successful in both attracting new residents as well as new retail projects. And Houston has been innovative in renovating older buildings to be used for retail and office space.
It isn’t just the suburbs that are booming in Houston – the city has made major efforts in revitalizing its downtown area and attracting residents and visitors. An estimated 4,000 people live in the downtown area – a figure that’s expected to rise to around 10,000 by 2010. Around 70,000 students are enrolled at the various colleges and higher education facilities that are located in and around downtown.
Revitalization of downtown began in earnest in 1995, in an attempt to bring retail, residential and commercial developments to the somewhat run down area. Since that time, around $ 4 billion has been invested in the retail property market downtown. This includes public and private developments – and the successful reclamation of over 1000 acres of land. Improvements such as improved parking and street lighting have also helped to attract tenants and retailers.
Today, downtown Houston boasts around 2.5 million square feet of retail space, much of it concentrated in the historic district, centered on Main Street and Texas Avenue. Notable recent large developments offering retail space include the Reliant Energy Plaza and the Five Houston Center.
Several major new developments are planned for downtown, including Discovery Green and One Park Place – the city’s first high rise luxury apartments in downtown in over 40 years. But the most ambitious project at the moment for downtown is Houston Pavilions, a 350,000 square feet development, planned to open in late 2008 at a cost of around $ 170 million.
One of the most respected local developers of both retail and residential property in the Houston area is the Johnson Development Corporation. The company is responsible for over forty acclaimed residential projects – ranging from golf course communities to townhomes – and almost a dozen retail developments.
Johnson Development was founded in 1975 and the president, Larry Johnson has over 40 years experience in the real estate business. Apart from its successful projects in the Houston area, the company is also responsible for developments in several other states, including California, Georgia and Colorado.
Some of the biggest developments by Johnson Development include shopping malls such as Forest West Center, Jones Square and the South Loop Center. Currently, the company’s biggest retail development in Houston is the huge Steeplechase Mall, offering around 350,000 square feet of retail space.
Johnson Developments is also a top developer in Houston when it comes to residential projects. Their residential projects range in size from single family home communities of 40 acres to townhouse communities and huge golf course communities. One of their biggest developments to date is the prestigious golf course community at Atascocita, a development which covers more than 5,000 acres.
All indications are that the retail property market in Houston seems set to continue with its strong growth – a trend which local companies such as Johnson Development can feel justifiably proud of.