At the end of the first quarter, Houston retail market overall had 5.4 percent vacancy and only 1.7 million square feet under construction, the lowest number we have seen in a few years, reported Colliers International. However, there are predictions that as many as 40 percent of shuttered retailers will not be able to reopen.
Tenants may be unable to make rent payments or may make reduced rent payments, if possible, which would impact the owners of retail properties. There is a potential domino scenario, where rent payments could be delayed or lost altogether. Owners would then be unable to cover their debt, creating a loss of liquidity that could easily translate into owners being unable to fund tenant improvements and commissions for new leases.
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