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 2012 industrial market update

Source: REOC San Antonio

The San Antonio industrial market continued its strong performance in the final quarter of 2012 to close out the year with a citywide vacancy rate under 10%.  New leases and expansions generated more than 207,000 square feet of positive net absorption in the fourth quarter which raised the year-end total to 1.2 million square feet – a level not seen since 2007 when the market recorded more than 1.4 million square feet.  Although the Service Center/Flex market remained comparatively weak, the Warehouse market experienced healthy leasing activity led by KLN Steel Products (175,000 sf) at BAMC Heights Distribution Center.  Demand for warehouse space has been funneled into existing facilities which reduced the citywide vacancy rate to 7.5%.   Although new construction would normally be in play by this point in the recovery cycle, a tough lending environment has restricted the pipeline of speculative development. 

Meanwhile, the market continues to see the development of build-to-suit and user facilities. Oil field service companies such as Baker Hughes, Weatherford International, Schlumberger and Halliburton have recently completed new operations centers; but not all activity is related to the Eagle Ford Shale play.  Glazer’s Inc., for example, is nearing completion on a 518,000 square-foot distribution facility on the city’s southwest side and construction is underway on the 1.26 million-square-foot Amazon.com Fulfillment Center in the Northeast sector.  

Looking ahead, the market is poised for growth in 2013; even if speculative construction remains constrained, development of build-to-suit and user facilities will continue to expand the industrial footprint throughout the San Antonio area supporting both vital job growth and economic diversity.

Click to read related article: San Antonio’s industrial-space vacancy rate is at record low (San Antonio Business Journal, 1-25-13)

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