Houston's retail market saw positive net absorption of 560,000 square feet in Q2 2013, bringing the year-to-date total to 960,000 square feet absorbed. The citywide vacancy rate decreased from 7.0% to 6.8% between quarters. Notable tenants that opened new locations or expanded in Q2 include HEB, LA Fitness, Michael's, and Monkey Joe's. The average quoted rental rate increased slightly to $14.75 per square foot between quarters. With continued job and economic growth, Houston's retail market is expected to remain healthy.

1. www.colliers.com/houston
Q2 2013 | RETAIL MARKET
HOUSTON RETAIL
MARKET INDICATORS
Q2 2012 Q2 2013
CITYWIDE NET
ABSORPTION (SF) 508K 560K
CITYWIDE AVERAGE
VACANCY 7.2% 6.8%
CITYWIDE AVERAGE
RENTAL RATE $14.56 $14.75
DELIVERIES (SF) 105K 276K
UNDER
CONSTRUCTION (SF) 1.4M 632K
Houston’s retail market posted 560,000 SF of positive net absorption in
the second quarter, bringing the year-to-date total to 960,000 SF. Some
of the tenants who opened new locations during the second quarter
include HEB, LA Fitness, Michael’s, and Monkey Joe’s.
Although 276,000 SF of new retail space delivered during the second
quarter, Houston’s retail vacancy rate decreased from 7.0% to 6.8%
between quarters and from 7.2% in Q2 2012. Currently, there is 632,000
SF in Houston’s retail construction pipeline, which includes Whole Foods’
newest location in BLVD Place, located along Post Oak Blvd at San
Felipe.
The citywide average quoted rental rate for all property types increased
from $14.72 to $14.75 per SF between quarters and from $14.56 in Q2
2012. Houston retail rental rates vary widely from $10.00 to $70.00 per
square foot, depending on location, property type, and building class.
The Houston metropolitan area added 91,600 jobs between May 2012 and
May 2013, an annual increase of 3.4% over the prior year’s job growth.
Further, Houston’s unemployment fell to 6.4% from 6.8% one year ago
and Houston area home sales increased significantly, growing by 28.0%
over the year.
With continued expansion in the energy industry and a strong housing
market, Houston’s economy is expected to remain healthy for both the
near and long-term.
ABSORPTION, NEW SUPPLY & VACANCY RATES
0%
2%
4%
6%
8%
10%
12%
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
Absorption New Supply Vacancy
Houston’s Retail Market Vacancy Rate Drops
Below 7.0%
UNEMPLOYMENT 5/12 5/13
HOUSTON 6.8% 6.4%
TEXAS 6.8% 6.5%
U.S. 7.9% 7.3%
JOB GROWTH
ANNUAL
CHANGE
# OF JOBS
ADDED
HOUSTON 3.4% 91.6K
TEXAS 2.7% 297.9K
U.S. 1.2% 1.7M
JOB GROWTH & UNEMPLOYMENT
(Not Seasonally Adjusted)
HOUSTON RETAIL MARKET
RESEARCH & FORECAST REPORT
Houston

2. RESEARCH & FORECAST REPORT | Q2 2013 | HOUSTON RETAIL MARKET
SALES ACTIVITY
Houston retail investment sales
activity increased between quarters
with 205 sales transactions
recorded in the second quarter
compared to 180 in the first quarter.
Total sales transaction volume
totaled $1.1B and the average price
per SF was $180. The average cap
rate was 8.0%.
Several of the more significant
transactions that closed during the
second quarter include:
World Class Capital Group
purchased the 10-building, 450,000-
SF North Oaks Shopping Center
from AEW Capital Management in
June for $46.2M. The retail power
center, located in the Northwest
submarket, was 92% leased at the
time of sale and was purchased as
an investment. TJ Maxx, Ross
Dress for Less, Hobby Lobby, Big
Lots, and Staples are tenants in the
center.
Capcor Partners LLC purchased the
3-building, 102,837-SF Sheldon
Forest Shopping Center from
Weingarten Realty Investors in June
for $8.5M. The neighborhood
shopping center, located in the East
submarket, was 98% leased at the
time of sale. The center is
anchored by Gerland’s Food Fair
and other tenants include Burkes
Outlet, A Sound Discount
Warehouse, Family Dollar, and
Boost Mobile.
BNL Group Properties, Inc.
purchased the 20,580-SF Shops at
Fairfield from Satya, Inc. in April for
$5.8M. The center is located along
the perimeter of the Houston
Premium Outlet Mall, located in the
Northwest submarket. The strip
center was 94% leased at the time
of sale. Tenants include Verizon
Wireless, Paris Salon, All Floors &
More, Tomiko Restaurant, and
Sergio’s Mexican Grill.
LEASING ACTIVITY
Houston retail leasing activity in the
second quarter reached 939,600
SF, bringing the year-to-date total to
2M SF. Overall, transactions under
10,000 SF comprised the largest
group of retail leases, with the
market recording seventeen leases
over 10,000 SF and only five over
20,000 SF in the second quarter.
A partial list of the leases signed
during the second quarter are listed
in the table below.
RETAIL SALE TRANSACTIONS
North Oaks Shopping Center
FM 1960 and Veterans Memorial Dr.
Northwest Ret Submarket
RBA: 450,000 SF
Built: 1978/2004
Buyer: World Class Capital Group
Seller: AEW Capital Management
Sale Date: June 12, 2013
Sales Price: $46.2M
Sales Price PSF: $103
COLLIERS INTERNATIONAL | P. 2
Shops at Fairfield
29110 Highway 290, Cypress, TX
Northwest Ret Submarket
RBA: 20,580 SF
Built: 2010
Buyer: BNL Group Properties, Inc.
Seller: Satya, Inc.
Sale Date: April 10, 2013
Sales Price: $5.8M
Sales Price PSF: $282
1
Renewal 2
Expansion 3
Sublease
Building Name/Address Submarket SF Tenant Lease Date
Northchase Plaza North 23,946 Goodwill1,2
May-13
Eastwood Shopping Center Liberty Co 23,806 Tractor Supply Jun-13
Copperfield Crossing Northwest 21,130 Monkey Joe's Apr-13
Kingwood Commons North 10,846 PETCO May-13
Alvin Towne Plaza Southeast Outlier 9,700 NAPA Auto Parts Apr-13
Country Club Plaza Southeast 8,100 Chinese Buffet3
Apr-13
West Pearland Plaza Far South 7,390 CrossFit Propel Jun-13
Sagemont Center Southeast 5,140 Gulf Coast Community Health Services1
May-13
Vintage Park Northwest 4,925 Mo's Irish Grill Apr-13
Champions Village Northwest 4,888 Don Ramon's Mexican Restaurant Apr-13
3939 Montrose Blvd Inner Loop 4,136 Canopy Restaurant May-13
Q2 2013 Retail Leases

3. RESEARCH & FORECAST REPORT | Q2 2013 | HOUSTON RETAIL MARKET
RENTAL RATES
The citywide average quoted rental
rate increased to $14.75 from
$14.72 per SF NNN between
quarters and increased from $14.56
per SF NNN in Q2 2012.
Class A in-line retail rental rates
vary widely due to location and
center type. Recent quoted rates
for neighborhood centers, power
centers and unanchored strip
centers, range from $20.00 -
$35.00 per SF (Class B and below
can rent for $12.00 to $20.00 per
SF) while theme/entertainment
centers range from $25.00 - $35.00
per SF. Lifestyle centers and newly
constructed strip centers in Class A
locations such as High Street,
Uptown Park and The Vintage
range from $40.00 - $70.00 per SF.
VACANCY & AVAILABILITY
Houston’s retail vacancy decreased
from 7.0% to 6.8% in the second
quarter. By product type on a
quarterly basis, lifestyle centers,
theme/entertainment centers, and
single tenant properties all posted a
decrease in vacancy rate of 30
basis points followed by strip
centers, power centers, and malls
decreasing vacancy by 20 basis
points. Outlet center vacancy rates
saw the largest increase between
quarters, 40 basis points.
Houston’s retail construction
pipeline contains 632,000 SF and
second quarter deliveries totaled
276,000 SF.
ABSORPTION & DEMAND
Houston’s retail market posted
560,000 SF of positive net
absorption in the second quarter,
bringing the year-to-date positive
net absorption to 960,000 SF. The
opening of the new HEB Market in
Conroe and LA Fitness in the
Northwest submarket, contributed
over 163,000 SF to the second
quarter’s positive net absorption.
Other notable tenants that moved
into their space during the first
quarter include: Kelsey-Seybold
Clinic, Main Event, Michaels,
Monkey Joe’s, and PETCO as seen
in the table to the right.
HOUSTON RETAIL MARKET STATISTICAL SUMMARY
Q2 2013 ABSORPTION
Tenant/
Submarket
SF Occupied
HEB
Montgomery Co Ret 83,889
LA Fitness
Near Northwest Ret 80,000
Kelsey-Seybold Clinic
Southwest Ret 72,000
Main Event
Southwest Ret 57,063
Michaels
West Ret 23,000
Monkey Joe’s
Northwest 21,130
PETCO
North Ret 10,846
Chinese Buffet
Southeast Ret 8,100
Don Ramon’s
Northwest Ret 4,888
COLLIERS INTERNATIONAL | P. 3
Rentable
Area
Direct
Vacant SF
Direct
Vacancy
Rate
Sublet
Vacant SF
Sublet
Vacancy
Rate
Total
Vacant SF
Total
Vacancy
Rate
Q2 2013
Net
Absorption
YTD 2013
Net
Absorption
Class A
Rental Rates
(in-line)*
Strip Centers (unanchored) 32,048,543 3,252,065 10.1% 18,803 0.1% 3,270,868 10.2% 90,769 108,682 $20.00-$35.00
Neighborhood Centers (one anchor) 68,674,242 7,078,334 10.3% 151,134 0.2% 7,229,468 10.5% 83,836 307,799 $20.00-$35.00
Community Centers (two anchors) 41,618,907 2,541,191 6.1% 112,696 0.3% 2,653,887 6.4% 1,577 113,083 $18.00-$30.00
Power Centers (3 or more anchors) 19,715,839 1,031,423 5.2% 43,624 0.2% 1,075,047 5.5% 44,390 47,047 $20.00-$35.00
Lifestyle Centers 4,180,721 255,393 6.1% - 0.0% 255,393 6.1% 12,459 3,560 $40.00-$70.00
Outlet Centers 1,593,814 132,724 8.3% - 0.0% 132,724 8.3% (7,418) (6,418) N/A
Theme/Entertainment 676,840 228,813 33.8% - 0.0% 228,813 33.8% - - $25.00-$35.00
Single-Tenant 64,422,260 1,331,106 2.1% 21,816 0.0% 1,352,922 2.1% 253,292 292,816 N/A
Malls 30,199,471 1,675,871 5.5% 58,539 0.2% 1,734,410 5.7% 80,979 93,080 N/A
Greater Houston 263,130,637 17,526,920 6.7% 406,612 0.2% 17,933,532 6.8% 559,884 959,649

4. RESEARCH & FORECAST REPORT | Q2 2013 | HOUSTON RETAIL MARKET
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lisa.bridges@colliers.com
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