Houston’s retail real estate market remained fundamentally strong in Q2 2026, supported by tight availability, continued rentgrowth, positive absorption, and favorable regional demographics. Retail vacancy stood at just 5.4%, while average market rents reached $24.88 per square foot and increased 1.9% year over year. The market recorded approximately 1.4 million square feet of absorption, indicating continued demand for well-located retail space, while 5.0 million square feet remained under construction, providing opportunities for expanding retailers and tenants seeking new locations. Investment activity moderated, with 12-month sales volume declining 18.2%, while the market cap rate averaged 7.3%, potentially creating a more selective acquisition environment for investors. Houston’s broader economic fundamentals remain a key advantage, with 1.1% job growth and 1.6% population growth—both stronger than national levels—helping sustain consumer demand and supporting the long-term outlook for retail owners, investors, developers, and tenants.