Mark Sondock isn’t worried about Houston’s retail market amid the energy downturn.
In fact, low oil prices are a boon to local retailers, whose shoppers have more disposable income to spend on goods and services. And despite the oil slump, Houston still has a modest population, housing and job growth, said Sondock, Stream Realty Partners’ managing director overseeing Houston’s retail market.
“I’m not concerned about the price of oil,” said Sondock at Stream Realty’s annual State of the Houston Market event Oct. 13. “Because we have jobs, population and housing, we have demand for retail in Houston.”
Houston has 5 million square feet of new retail projects under construction across the region, the most retail space under development in the entire country, Sondock said.
Most of this new retail space coming online — about 80 percent — is already preleased to tenants, Sondock said. Moreover, 92.4 percent of existing retail space is occupied across Houston.
“Supply is at a very healthy level,” Sondock said of Houston’s retail market.
New competitors are continuing to flock to Houston amid this retail boom, Sondock said.
Lidl, a German supermarket chain, is entering the Bayou City, ramping up the city’s grocery war in particular with Aldi, which opened a new location in northwest Houston. In the sporting goods arena, Dick’s Sporting Goods (NYSE: DKS) is opening six new stores across Houston later this month to compete with Academy Sports + Outdoors, which opened two new stores in the northeast Houston and Pearland submarkets. And Total Wine is opening its first Houston-area store to battle with Spec’s Wines, Spirits and Finer Goods, Sondock said.
Online retailers, like Amazon, are also looking to open physical stores as retailers battle with e-commerce websites. In addition, mainstay retailers, like Whole Foods Market, are looking to diversify their offerings. Whole Foods is looking to open a “365 by Whole Foods” market in the Heights area, which will cater toward younger shoppers with high-quality, but affordable, food, Sondock said.
Stream Realty has brokered more than 1 million square feet of retail deals across Houston this year, despite the oil slump.
“I’m feeling like the Hulk,” Sondock said of Houston’s retail sector.
By: Paul Takahashi
SOURCE: Houston Business Journal