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

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Supply ahead of industrial demand — but the gap is getting more narrow

REOC San Antonio Outlines No AlamoSan Antonio undoubtedly has one of the most active industrial markets in the state, if not the country, so even though there have been multiple large-scale industrial developments delivered this past quarter, it will only be a matter of time before the space gets filled.

According to REOC San Antonio, the city’s industrial market had a slight bump in the vacancy rate in second quarter 2015, but only because of the addition of more than 484,000 square feet of new lease space so far this year. That rate rose to 8.4 percent, up from 5.9 percent during the same quarter in 2014.

Over the past year, San Antonio’s industrial market had nearly 640,000 square feet of positive net absorption, offset by more than 863,000 square feet of new inventory. REOC found that the difference between new supply and demand is roughly equivalent to one good-sized warehouse building.

What’s also interesting to see is that the vacancy rate for service centers/flex combined spaces, while still slightly higher than the rate for distribution and warehouse facilities, has dropped considerably. A year ago, the vacancy rate among these types of facilities was 12.2 percent, but last quarter, it fell to 9.9 percent. Rents also rose for service centers/flex combined space, supporting a year-over-year increase of 22 cents to reach a citywide average of $9.60 per square foot, or an annual gain of 2.4 percent.

With vacancy rates below 10 percent, developers are taking a half-glass-full approach in terms of new projects. There is nearly 673,000 square feet of industrial product under construction, and as long as they’re in well-located areas and can boast high-quality amenitites, there shouldn’t be too much difficulty filling the space. Two major groundbreakings last quarter included the Doerr Lane Industrial Park, which will deliver nearly 214,000 square feet, and the Cornerstone Industrial Park 3, which will span more than 144,100 square feet.

Click to read entire article: Supply ahead of industrial demand — but the gap is getting more narrow (09-11-15)


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