Market Report
Houston Retail Market Report
3Q 2026
Capital Floods In Despite First-Half Demand
and Construction Hitting Historic Lows
First-half development falls as demand flips. Construction in the first six months of this year fell to its lowest level since 2011, with just under 1.3 million square feet delivered, roughly half the 10-year average. In addition to areas that delivered no completions, seven of the 12 submarkets saw a decrease in first-half space delivered compared with the prior year. The retreat reflects elevated material and land expenses alongside still-high financing costs, which have sidelined speculative development. The pullback coincides with first-half demand reaching a historic low, as the second quarter of 2026 posted the metro’s steepest net relinquishment since at least 2007.
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