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 retail market update

Source: REOC San Antonio

San Antonio-area retail properties ended the year on solid ground.  Fourth quarter activity included the opening of Target (135,270 sf) at the newly redeveloped Terrell Plaza shopping center in the Northeast sector.  In all, new leases and expansions across the city generated 151,695 square feet of positive net absorption in the final quarter of the year which raised the year-end total to a very respectable 829,161 square feet.    

Because precious few new retail projects were added over the past year, demand for retail space was funneled into existing centers. Leasing activity re-tenanted a number of dark big boxes which helped tighten the citywide vacancy rate to 11.7%, down compared to 11.8% last quarter and 12.9% recorded at the end of 2011.  Desirable space in prime-locations is becoming scarce, especially within the most active Power Center category which closed the year with a citywide vacancy rate of 5.8%.

Improved vacancy supported a slight increase in the average citywide quoted triple net rental rate which inched up $0.14 over last quarter to reach $18.51 per square foot per year – up $0.32 compared to the same quarter last year for a modest annual increase of 1.8%.  Even though demand for retail space is tightening vacancy which will put upward pressure on rental rates, the pipeline of speculative development is expected to remain relatively empty heading into 2013; meanwhile, several new Walmart stores are in the works.

Click to read related article: San Antonio’s retail real-estate sector is starting to heat up (San Antonio Business Journal, 2-15-13)

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