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

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REOC San Antonio releases 2Q 2013 retail market update

Source: REOC San Antonio/Xceligent

Source: REOC San Antonio/Xceligent

Conditions in the San Antonio retail market improved slightly in the second quarter.  Thanks to the continued backfilling of anchor space, the citywide vacancy rate tightened to 10.6% – a level not seen since 2006.  Power Centers boast a citywide vacancy rate of 5.3% – the healthiest of all the product types while Community, Neighborhood and Strip centers struggle with double-digit vacancy rates.  Still, over-the-year improvement was demonstrated across the board.  

The development pipeline features several new Walmart stores and a high-end H-E-B grocery store in Stone Oak but speculative development remains at an historic low with only a few new and expansion projects currently under construction mostly in the Northwest sector. 

Area retail centers experienced 118,705 square feet of positive net absorption in the second quarter which offset first quarter losses and returned the year-to-date total to the black with 94,487 square feet of net gain.  Leading leasing activity, Gander Mountain inked a lease for 48,663 square feet to backfill the darkened Sportsman’s Warehouse at Westover Marketplace in the Far West sector.   Wonderland of the Americas mall signed Burke’s Outlet (24,150 sf) and a portion of the former H-E-B in Bulverde has been leased to Beall’s (21,000 sf).          

Rental rates remained relatively flat compared to the previous quarter.  Steady leasing activity and healthy retail sales are expected to have a positive impact on the local market but the upward pressure is not projected to produce dramatic increases in the near term.  The citywide average asking rental rate for all types of space currently stands at $15.95 per square foot per year on a triple net basis.

Over the 12-month period ending June, the San Antonio-New Braunfels MSA added 14,700 jobs for an annual job growth rate of 1.7%.  Supported by a growing Energy sector and strong Health Care industry, the employment base is expected to grow.  The opening of new Walmart stores will add to the local retail trade sector.

Click to download REOC San Antonio’s 2Q 2013 Retail Market Report


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