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 2Q 2012 retail market update

Source: REOC San Antonio

Although still well-below pre-recession levels, consumer confidence is on the rise; however, consumer spending remained flat in the second quarter, according to the Commerce Department.  Despite rising gas prices and a persistently difficult small-business lending environment which has hampered a broad resurgence of the retail sector, the local market posted a stable second quarter performance.

New leases and expansions within San Antonio retail centers generated 205,899 square feet of positive net absorption between the beginning of April and the end of June which raised the year-to-date total to 292,713 square feet of net gain through mid-year.  In the absence of any significant speculative construction projects, leasing activity has been focused on re-tenanting existing vacant spaces including several large big boxes such as the formerConn’s at The Vineyard which was recently backfilled by Golfsmith (30,400 sf). 

As a result, the citywide retail vacancy rate tightened slightly to 12.7% compared to 12.9% last quarter and remained stable compared to 12.8% recorded in the same quarter last year.  The average citywide quoted triple net rental rate climbed $0.21 from last quarter to reach $18.35 per square foot per year – up $0.14 compared to a year ago for a marginal annual increase of 0.7%.  Power Centers continue to outperform other product types with a current vacancy rate of 6.7% and a current average asking rental rate of $25.06.

The prime area of growth continues to be grocery-anchored centers.  In the second quarter, H-E-B Grocery delivered the chain’s largest H-E-B Plus store (182,000 sf) with additional adjacent strip center space at Bandera Roadand Loop 1604 in the Northwest market.  In addition, a new Whole Foods (35,000 sf) is under construction at Blanco & Loop 1604 and discount retailer Walmart has laid claim to several area sites in preparation for a building campaign that is to deliver three new stores in 2013 including Helotes Town Centre at Bandera & Leslie roads, Binz Engleman & Foster roads and Bandera & Woodlawn roads and another in 2014 at Wurzbach Parkway & Blanco Road.

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