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 retail market update

Source: REOC San Antonio

Despite challenges, the San Antonio retail market continues to show general improvement thanks, in large part, to a stable economy that is reportedly one of the strongest in the nation, evidenced by San Antonio’s top ranking in the list of “Best cities for jobs right now” recently published by Forbes magazine. 

Steady leasing activity improved the citywide vacancy rate to 12.8% compared to 13.3% recorded a year ago.  Meanwhile, the citywide average quoted triple net rental rate increased slightly to $18.17 per square foot annually – up twenty-five cents compared to the same quarter last year marking a modest 1.4% annual increase. 

Leasing activity was widespread and resulted in 92,032 square feet of positive net absorption citywide led by new leases in area power centers including Versona (9,488 sf) at Huebner Oaks Shopping Center in the Northwest sector, Rustic Gallery (5,911 sf) at The Vineyard in the Far North Central sector, Impression Bridal (7,000 sf) at Park North and Corner Bakery (3,500 sf) at Alamo Quarry Market in the North Central sector. 

It appears that leasing velocity and demand for retail space, which generated a total of 315,819 square feet of positive net absorption year-to-date, are steadily moving the San Antonio retail market along a path of recovery in 2011.  While demand for anchor space has not yet returned in full force, small and mid-sized transactions continue to fuel healthy activity.  At the same time, the market continues to see new restaurant and quick-serve concepts enter the market like BRIO Tuscan Grille, Copeland’s of New Orleans, Furr’s Fresh Buffet, Cheddar’s and Steak ‘n Shake.

Speculative retail development remains limited and the majority of the 272,000 square feet delivered this year has been dominated by growing grocer H-E-B but construction is picking up with approximately 732,000 square feet currently under construction.  Looking ahead, large retailers are once again sniffing out locations and drawing up plans for new store locations to be announced when the time is right.

Click to read related article: San Antonio’s retail market shows resilience in weak economy, study finds (San Antonio Business Journal, 11-4-11)

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