1. www.colliers.com/houston
Q4 2012 | RETAIL MARKET
MARKET INDICATORS
YE 2011 YE 2012
CITYWIDE NET
ABSORPTION (SF) 1.8M 1.2M
CITYWIDE AVERAGE
VACANCY 7.2% 7.0%
CITYWIDE AVERAGE
RENTAL RATE $15.13 $14.34
DELIVERIES (SF) 625K 1.1M
UNDER CONSTRUCTION
(SF) 617K 451K
1
Houston’s Retail Market Absorption Boosted by
Year-end Push
Houston’s retail market posted 1.1M square feet of positive net absorption in Q4
bringing the year-end 2012 total to 1.2M SF. The opening of Phase 1 of the Tanger
Outlet Center in Texas City as well as the opening of the new HEB in Cypress
contributed over 534,000-SF to the fourth quarters positive net absorption. Other
tenants that moved during the fourth quarter include American Girl, Wellborne
Cinema, Bone Daddy’s and Serious Cigars.
Houston’s retail vacancy rate decreased from 7.2% to 7.0% between quarters as
well as over-the-year. Due to the large amount of new inventory deliveries,
Houston’s retail vacancy only decreased 2% between quarters despite the
significant positive absorption.
The citywide average quoted rental rate for all property types is $14.34 per square
foot; however, rental rates vary widely from $10.00 to $70.00 per square foot
depending on location and property type and class.
The Houston metropolitan area added 85,000 jobs between November 2011 and
November 2012, an annual increase of 3.1% over the years prior job growth.
Further, Houston’s unemployment rate fell to 5.8% from 7.3% one year ago which
has bolstered annual home sales in the Houston area. 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
RESEARCH & FORECAST REPORT
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
JOB GROWTH & UNEMPLOYMENT
(Not Seasonally Adjusted)
UNEMPLOYMENT 11/11 11/12
Houston 7.3% 5.8%
Texas 7.2% 5.8%
U.S. 8.2% 7.4%
JOB GROWTH
ANNUAL
CHANGE
# OF JOBS
ADDED
Houston 3.2% 85K
Texas 2.6% 274K
U.S. 1.4% 1.9M

2. RESEARCH & FORECAST REPORT | Q4 2012 | HOUSTON RETAIL MARKET
2
Rental Rates
The citywide average quoted rental rate
increased from $14.30 to $14.34 per
SF NNN between quarters and
decreased from $15.13 over the year.
Class A in-line retail rental rates vary
widely due to location and center type.
Recent quoted rates for 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 power centers with three or
more strong anchors range from
$10.00 - $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 7.2% to 7.0% in the fourth
quarter. By product type on a quarterly
basis, outlet centers posted the largest
vacancy rate decrease from 10.1% to
7.8%, 230 basis points. Strip centers,
neighborhood centers and theme/
entertainment vacancy rates remained
unchanged between quarters.
Houston’s retail construction pipeline
contains 451,000 SF, of which
approximately 31% is pre-leased.
Fourth quarter deliveries totaled
756,000 SF.
Absorption & Demand
Houston’s retail market posted 1.1M SF
of positive net absorption in the fourth
quarter bringing the year-end total to
1.2M SF. The opening of Phase 1 of the
Tanger Outlet Center in Texas City as
well as the opening of the new HEB in
Cypress contributed over 534,000 SF
to the fourth quarters positive net
absorption.
Other notable tenants that moved into
their space during the fourth quarter
include: Academy Sports, Kroger, LA
Fitness, and Thrift Outlet as seen in the
table to the right.
HOUSTON RETAIL MARKET STATISTICAL SUMMARY
Q4 2012 ABSORPTION
Tenant
SF
Occupied
Tanger Outlet Center – Ph1 350,000
HEB 184,083
Academy Sports 72,979
Kroger 48,501
LA Fitness 45,000
Thrift Outlet 26,402
99¢ Store 18,119
American Girl 17,685
Wellborne Cinema 15,180
Ogle School 11,468
JB’s Multi Events 10,300
Velvet Restaurant 8,878
Bone Daddy’s 7,000
Serious Cigars 7,000
Rentable
Area
Direct
Vacant SF
Direct
Vacancy
Rate
Sublet
Vacant SF
Sublet
Vacancy
Rate
Total Vacant
SF
Total
Vacancy
Rate
Q4 2012 Net
Absorption
2012 YTD
Net
Absorption
Class A Rental
Rates (in-line)*
Strip Centers (unanchored) 31,381,269 3,247,523 10.3% 22,951 0.1% 3,270,474 10.4% 35,161 (89,158) $20.00-$35.00
Neighborhood Centers (one anchor) 68,820,507 7,301,626 10.6% 156,600 0.2% 7,458,226 10.8% 115,789 (335,197) $20.00-$32.00
Community Centers (two anchors) 40,772,147 2,548,743 6.3% 128,071 0.3% 2,676,814 6.6% 125,930 212,540 $15.00-$30.00
Power Centers (3 or more anchors) 20,297,712 874,797 4.3% 71,190 0.4% 945,987 4.7% 93,299 361,102 $10.00-$35.00
Lifestyle Centers 4,618,124 275,217 6.0% - 0.0% 275,217 6.0% 9,509 44,237 $40.00-$70.00
Outlet Centers 1,573,627 122,006 7.8% - 0.0% 122,006 7.8% 351,610 353,673 N/A
Theme/Entertainment 653,840 224,804 34.4% - 0.0% 224,804 34.4% - - $25.00-$35.00
Single-Tenant 63,079,142 1,491,177 2.4% 33,660 0.1% 1,524,837 2.4% 364,472 444,792 N/A
Malls 29,487,935 1,770,164 6.0% 58,539 0.2% 1,828,703 6.2% 31,304 164,400 N/A
Greater Houston 260,684,303 17,856,057 6.8% 471,011 0.2% 18,327,068 7.0% 1,127,074 1,156,389

3. RESEARCH & FORECAST REPORT | Q4 2012 | HOUSTON RETAIL MARKET
SALES ACTIVITY
Houston retail investment sales activity
included 72 recorded transactions with
a total dollar volume of approximately
$115.4M, averaging $116 per SF with
an average capitalization rate of 8.7%.
Some of the more significant
transactions that closed during the
fourth quarter include:
Becar Venture purchased the 68,780-
SF West Loop Plaza from Cathay Bank
in December for $9.9M. The
neighborhood center located in the
Inner Loop River Oaks submarket was
100% leased at the time of sale and
was purchased as an investment.
Golfsmith and Mattress Giant are the
centers anchor tenants.
RioCan REIT purchased the 180,000-SF
Louetta Central Shopping Center
located in the North/Spring Creek
submarket from URDANG & RCG
Ventures in November for $26M. Major
tenants in the center include Michaels,
Famous Footwear, and Kohl’s.
First Washington Realty purchased the
125,200-SF Woodlands Crossing
Shopping Center from Realm Realty in
December for $43.2M. The
neighborhood center located in The
Woodlands and Montgomery County
submarket was purchased as an
investment. Some of the centers major
tenants include Trader Joe’s, Ace
Hardware, 24 Hour Fitness, and
PETCO.
West Houston Retail LLC purchased a
4-property portfolio from Satya, Inc. for
approximately $15.8M in November.
The portfolio included four strip centers
totaling 71,374-SF and were located in
Richmond, Cypress and Houston, TX.
The portfolio was purchased as an
investment. Some of the tenants in the
centers include Quick Weight Loss,
Subway, New York Pizzeria, and State
Farm.
LEASING ACTIVITY
Houston retail leasing activity for fourth
quarter 2012 totaled 841,061-SF in 323
transactions compared to 346
transactions totaling 866,000-SF one
year ago. Overall, transactions under
10,000 SF comprised the largest group
of retail leases, with the market
recording only nine leases over 10,000-
SF and two over 20,000-SF in the
fourth quarter.
3
RETAIL SALE TRANSACTIONS
West Loop Plaza1
3005-3115 West Loop South, Houston, TX
Inner Loop River Oaks Ret Submarket
RBA: 68,780 SF
Built: 2006
Buyer: Becar Venture
Seller: Cathay Bank
Sale Date: December 5, 2012
Sales Price: $9.9M
Sales Price PSF: $144
Woodlands Crossing
10864-10868 Kuykendahl Rd., The
Woodlands, TX
Montgomery County Ret Submarket
RBA: 125,200 SF
Built: 2012
Buyer: First Washington Realty
Seller: Realm Realty
Sale Date: December 19, 2012
Sales Price: $43.2M
Sales Price PSF: $345
1Colliers International Transaction
Building name/address Submarket Tenant Lease date
Point Nasa Shopping Center NASA/Clear Lake 47,900 Conn's Oct-12
Cypress Landing Shopping Center NorthBelt/Greensoint 28,193 Gold's Gym Dec-12
Pasadena Town Plaza Near Southeast 20,558 Goodwill Nov-12
Fondren Southwest Village Southwest 16,579 Palais Royal Oct-12
Westheimer Commons West/Far West 14,500 Shoe Carnival Oct-12
Meadow Park Shopping Center Southeast Outlier 14,000 Family Dollar Oct-12
Cypress Station Square Far North 13,400 Davita Dialysis Nov-12
Pasadena Town Plaza Near Southeast 8,702 Anna's Linens Nov-12
Cypress Station Shopping Center North FM 1960/I-45 7,344 The Pour House Oct-12
Village Green Shopping Center West/Far West 5,900 Snooker 147 Oct-12
908 Congress CBD 5,400 Batanga Restaurant Oct-12
West Loop Market Center Inner Loop/River Oaks 4,700 S Factor Oct-12
River Oaks Shopping Center Inner Loop/River Oaks 4,375 J. Jill Oct-12
SF
Q4 2012 Top Retail Leases

4. RESEARCH & FORECAST REPORT | Q4 2012 | HOUSTON RETAIL MARKET
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