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 4Q 2011 industrial market update

Source: REOC San Antonio

Throughout the greater San Antonio area, all types of real estate have benefitted from activity related to the Eagle Ford Shale play which was one of the top stories in 2011.  In addition to the millions of dollars being invested by Halliburton, Weatherford International and Baker Hughes to develop operations centers, a surge of small and mid-sized oilfield-related service providers have gobbled up free-standing industrial properties, especially those with a yard that can accommodate storage of equipment and materials.  This activity has led to a shortage of quality, small available buildings.

According to the survey of nearly 32 million square feet of industrial space, industrial properties experienced 146,268 square feet of positive net absorption in the fourth quarter which raised the year-end total to 396,832 square feet of net gain.  As a result, the citywide vacancy rate held steady at 13.2% compared to 13.1% last quarter and 13.3% recorded in the final quarter of 2010.  Similarly, the citywide average quoted rental rate for all types of industrial space combined remained stable over the quarter at $5.55 per square foot per year – down one cent compared to a year ago.

Looking at the numbers, the local industrial market has remained relatively stable over the year but stability has been uneven.  Flex properties have shown some gains but Service Centers continue to grapple with increasing vacancy.  Warehouse properties have reflected the most stability but much of that comes as the result of temporary sand storage related to Eagle Ford Shale activity which is not a business activity generator.  Looking ahead, however, deal flow appears to be picking up and absorption is expected to be strong heading into the first quarter of 2012 which will move the market further along the path of recovery.

Click to read the related article: Industrial sector proves its mettle beyond the oil-and-gas industry (San Antonio Business Journal, 2-3-12)

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