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 Releases 2Q 2017 Retail Market Report

Source: REOC San Antonio

Source: REOC San Antonio

In the midst of what some economists are calling a retail meltdown, the San Antonio retail market maintained its sub-ten percent citywide vacancy rate and recorded gains in the second quarter which offset losses recorded in the first quarter.  The growing popularity of discount stores accounted for much of the gain; such as, Dirt Cheap (23,864 sf) which backfilled a portion of an old Albertsons building on Walzem Road.

At the close of the second quarter, the citywide vacancy rate tightened to 7.5% compared to 7.8% recorded last quarter as well as in the same quarter last year. On average citywide, the cost of renting retail space decreased to $16.46 per square foot per year on a triple net basis.  While the average quoted rent increased $0.45 compared to the same quarter last year, the over-the-quarter comparison saw a sharp decline of $2.04.  The primary factor behind the quick drop is directly related to the lower rents quoted for the former big box space left behind by Target’s closure at the Fiesta Trails power center.

Retail, in general, is changing.  Big name retailers are combating the growing impact of online shopping by focusing on their best-performing locations and experimenting with alternative services, such as curbside pick-up and delivery options.  No doubt some centers will suffer losses as the effects of national closures ripple through San Antonio; this disruption is not the end of retail but rather the catalyst for transformation.

Click here to access REOC San Antonio’s 2Q 17 Retail Snapshot report.

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