Forrest tells GlobeSt.com that the city's annual average is about three million sf. He fears this staggering amount of space, coupled with the yearly absorption rate of 4.8 million sf, will drive the vacancy rate up two or three more points. He also feels the retail's stabilized rental rates may make it harder for new centers to drive up rates to cover construction costs.

In his annual shopping center market survey, Forrest predicts that nothing catastrophic will occur, but does take note of the quick impact that an economic downturn has on the retail industry. He also says that it could impact underwriting decisions that are based on national and not local levels although Houston is enjoying a counter cyclical boost as a result of its energy industry boom. The end result is the point spread could be higher when developers try to snag permanent financing.

Eight of the 35 centers coming on line this year are situated in the southeast submarket, seven in the northwest and six in the southwest. Forrest says growth in retail construction generally follows residential growth and these three submarkets have seen substantial residential growth over the past few years.