HOUSTON--(BUSINESS WIRE)--Prices for retail properties and land suitable for shopping center development rose significantly in Houston over the last 12 months, as retailers sought to cash in on Houston’s high-growth cycle, according to Deal Sikes & Associates, a leading Texas-based valuation firm.
“Even though Houston has been one of the nation’s leaders in population growth for some time, the pace of shopping center construction has been very modest in recent years,” said Matthew Deal, principal of Deal Sikes & Associates. “Suburban Houston has been growing steadily. Home building has been strong and many areas are underserved, with a shortage of retail, restaurants and services.”
The Houston area led the nation in population growth last year, adding 157,000 new residents, according to the Greater Houston Partnership. The U.S. Census Bureau estimated Houston’s population stood at 6.5 million in mid-2014, a gain of 570,000 people since the 2010 census.
“The population growth, along with new roadways and new housing, has retailers scrambling now to establish a position before their competitors get entrenched in Houston’s fast-growing suburbs,” Deal said. “Prices for land at heavily traveled intersections have jumped sharply, more than 20 percent in some cases, as shopping center developers compete for great sites.”
Retailers are facing rising rental rates in many shopping centers and occupancy rates are high in existing retail properties.
“Investors are searching for opportunities to purchase retail centers in Houston and the inventory of available properties is tight,” said Mark Sikes, principal of Deal Sikes & Associates. “Shopping centers are gaining favor with investors. Current pricing for existing retail centers is very impressive.”
A leading commercial real estate valuation firm, Houston-based Deal Sikes & Associates provides valuation and counseling services for real estate companies, governmental agencies, law firms, real estate investors and corporate clients across the nation. www.DealSikes.com