Houston’s retail market maintained healthy fundamentals during Q3 2026, supported by stable occupancy, continued rental growth, and positive tenant demand. Lee & Associates reports that direct vacancy remained at 5.6% for the second consecutive quarter, while the average direct asking NNN rent increased to a record $22.03 per square foot, approximately 8.1% above Q3 2025.

Retail demand strengthened during Q3 2026, with net absorption reaching 551,122 square feet, a significant improvement from 39,756 square feet in the previous quarter. Leasing activity totaled approximately 1.75 million square feet, bringing year-to-date leasing activity to nearly 5.9 million square feet. Through the first nine months of 2026, Houston recorded more than 1.1 million square feet of positive net absorption.

Development activity emerged as one of the quarter’s most notable trends. Houston’s construction pipeline expanded to approximately 5.1 million square feet, the highest level since 2019, while quarterly deliveries moderated to approximately 449,000 square feet. New construction remains concentrated in expanding suburban growth corridors,.

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