REOC San Antonio
Commercial Real Estate Since 1974   
Kim_Gatley
Kim Gatley
S
enior Vice President & Director of Research at REOC San Antonio

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REOC San Antonio releases 1Q 2010 Industrial stats

Source: REOC San Antonio

Healthy leasing activity in the first quarter substantiated the notion that the general economy is starting to turnaround but significant challenges still lay ahead for the local industrial market. 

While the majority of gross activity was mainly horizontal movement within the market, new leases and expansions generated 280,956 square feet of positive net absorption led by distribution warehouse activity in the dominant Northeast sector including Methodist Healthcare System (52,310 sf) at Green Mountain Business Park and the expansion of Yazaki (28,252 sf) at Cornerstone Industrial Park.

As a result, the citywide vacancy rate improved to 12.7% compared to 13.6% last quarter and 13.1% recorded a year ago. In turn, the citywide average quoted triple net rental rate for all property types ticked back up to $5.57 per square foot per year – up two cents from last quarter to return to the same rate posted a year ago. Meanwhile, available concessions and deep discounts offered by landlords working to retain and attract tenants will keep the leverage pendulum in the tenant’s favor throughout the remainder of the year.

Challenging the industrial market’s momentum will be vacant space expected to return to the market in the second half of the year. ProLogis, the principal player in the local industrial market, is currently marketing several large blocks of space associated with the recently announced move by American Standard which will create roughly 600,000 square feet of vacancy upon relocation to Dallas this summer.

In addition, Sysco Corp., distributor of foodservice products, announced plans to build a 635,000 square-foot distribution complex on 50 acres recently purchased in the northeast satellite community of Schertz. The new facility will consolidate operations out of Sysco-owned properties in both San Antonio (330,000 sf) and Round Rock (163,000 sf).

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