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 1Q16 Retail Market Update

Source: REOC San Antonio

Source: REOC San Antonio/Xceligent

The San Antonio retail market maintained a healthy sub-ten-percent vacancy rate in the first quarter and appears to be on track for another solid performance in 2016.  Leasing activity in the first three months of the year generated 308,914 square feet of positive net absorption with Neighborhood Markets accounting for roughly one-third of the total net gain. 

New inventory was comprised of two renovated properties including the greatly anticipated Shops at Rivercenter (488,363 sf).  In the Northeast sector, Mega Furniture (34,000 sf) opened at Forum Crossing (108,000 sf) – the redevelopment of what was originally a Kmart and later served as a call center at 3150 Pat Booker Road.

Now that the sizeable Shops at Rivercenter project is complete, the pipeline for retail lease space has dwindled to less than 170,000 square feet; however, new big box construction delivered a Walmart Supercenter (182,000 sf) in Cibolo at Cibolo Valley & Borgfeld with another nearing completion at Kitty Hawk & Loop 1604.  In addition, Walmart added three new Neighborhood Markets with two more coming online in the second quarter – each spanning roughly 41,000 square feet.  Academy Sports & Outdoors will open a 62,942-square-foot store at 7503 S. Zarzamora and Rooms To Go recently opened a 40,000-square-foot store at 15339 IH-35 North.

The San Antonio retail market closed the first quarter with a citywide vacancy rate of 9.2% which is relatively stable compared to 9.3% last quarter and 9.0% recorded this time last year.  On average, the cost of renting retail space increased to $16.13 per square foot per year on a triple net basis which is up $0.59 compared to a year ago for a moderate 3.8% annual increase.

Although speculative development remains limited, the San Antonio retail market will continue to benefit from population growth and a strong housing market.

Click to download REOC San Antonio’s complete 1Q 2016 Retail Market Report

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