How Downtown Houston Is Taking A Dual-Tactic Approach To Retail

Visitors to Downtown Houston are often surprised by the lack of activity on the street. What they don't see is the hustle and bustle beneath the surface in Downtown's extensive tunnel system. As we add more residents and ground-level retail, how do the tunnels fit into the 24/7 destination Downtown is striving to become? To hear more about the Future of Downtown, be sure to get a ticket for Bisnow's upcoming event featuring discussion with Downtown's foremost experts.  

For years, people have commuted to Downtown in the morning and back to the suburbs at night, making certain parts feel like a ghost town after 7pm. The Downtown Living Initiative started back in 2013 to make Downtown more than just a work destination. 

The initiative has had great success, delivering about 3,300 new residential units with 2,800 under construction and another 1,500 planned, totaling about 8,000 units. PMRG EVP John Spafford thinks that progress isn't enough. He says Downtown needs to double that to be competitive. Central Houston president Bob Eury agrees. To him, the progress is just a start. He wants to be at 20,000 units.

The massive increase in residential units has put a strain on the retail market Downtown. The tunnel system is great for the thousands of workers in the office buildings it serves, acting as a valuable amenity drawing business to the CBD. But the tunnel system shuts down at 7pm, so that retail isn't available in the evening or weekends. Bob says street-level retail is critical to residents Downtown. "Downtown is at a pivotal point of moving from five days a week to seven days a week of activity, and the only thing that does that really is retail at street level." 

John agrees, and admits the tunnel system is a challenge to street-level retail. Retailers that open on street level don't get quite as much activity. Traffic doesn't peak at lunch because diners are down in the tunnels. Although some businesses operate on the street and in the tunnel, that isn't feasible for most. 

Bob sees the retail market shifting, but that doesn't mean the tunnels are going anywhere. The tunnels work well for food and beverage businesses serving office workers, and they'll continue to thrive.

Meanwhile, other types of retailers will demand the seven-day activity that can only be found above ground. The large increase in hotel space Downtown will affect the retail market greatly as Downtown becomes more active after hours. That's why new deliveries and renovations around Downtown nearly all include street-level retail space. 

To learn more about how Downtown is emerging from the depths (literally and figuratively), join us for the Future of Downtown May 25 at the Hilton Americas! Sign up here.