San Antonio industrial market hot

​​​SAN ANTONIO – Nearly 1 million sf of new industrial space was delivered to the market in the second quarter,
according to the survey of nearly 37.4 million sf of industrial lease space conducted
by the research department of REOC San Antonio and confirmed by the Xceligent Industrial
Advisory Board.

Between the beginning of April and the end of June, new leases and expansions along with
the leasing activity that accompanied newly completed projects resulted in more than 1.3
million sf of positive net absorption.

“To help put the second quarter performance into perspective, the industrial
market experienced more absorption in three months than the annual totals recorded for
seven out of the last eight years,” says Kimberly Gatley, senior vice president and director
of research at REOC San Antonio, a locally-based, full-service commercial real estate
company. 

The citywide vacancy rate
tightened to 7.3 percent compared with 8.1 percent last quarter and 8.4 percent recorded in the same quarter last
year. The average quoted rental rate was at $5.87 per sf per
year on a triple net basis, down $0.16 from the same quarter a year ago.​

The citywide average cost for renting distribution warehouse space currently stands at $4.52
per sf annually, marking a $0.25 drop compared with a year ago, while the cost for
service center/flex space in the area currently averages $9.11 per sf, which is up
$0.34 from 12 months ago.

Looking ahead, nearly 1.3 million square feet of industrial lease space is moving through the
development pipeline which will grow the local inventory by more than 3 percent. The
majority of it is expected to reach completion before the end of the year and little has
reported any preleasing to date.