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 3Q industrial market update

Source: REOC San Antonio

Local industrial properties maintained a steady course in the third quarter with a citywide vacancy of 13.1% compared to 13.2% last quarter and 13.9% recorded a year ago.  Rental rates strengthened slightly in the third quarter evidenced by a two-cent increase over last quarter, but the citywide average of $5.55 per square foot per year is down two cents compared to the same quarter last year and many landlords are still willing to negotiate deep discounts in order to fill vacancies.  

New leases and expansions inked in the third quarter generated 105,290 square feet of positive net absorption which raised the year-to-date total to a respectable 265,564 square feet of net gain.  Businesses related to drilling in the Eagle Ford Shale have had a significant impact on the local industrial market but the better part of Eagle Ford activity doesn’t necessarily show up in the statistics because it involves smaller user buildings, specifically those with yards which can accommodate equipment and supplies.

For the first time in two years, the San Antonio industrial market is seeing the construction of a new speculative project.  East Group Properties is developing the Thousand Oaks Business Park located at 3660 Thousand Oaks near Wetmore Road.  Plans for the park call for three buildings of which two are currently under construction including a 73,074 square-feet warehouse and a 36,148 square-foot service center/flex building scheduled for completion in the first quarter of 2012.  Meanwhile, construction of several user buildings and build-to-suit projects continue to grow the overall industrial landscape. 

Looking ahead, oil field services companies related to the Eagle Ford Shale are expected to add to the list of construction projects with companies such as Halliburton, Schlumberger, Weatherford and Baker Hughes planning to lay down significant roots in the San Antonio market.  Not only does the addition of new facilities represent a considerable capital investment to the area but these companies bring the promise of more jobs and a significant economic impact for years to come.

Read related article: San Antonio’s industrial real-estate sector earns passable marks (San Antonio Business Journal, 11-11-11).

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