REOC San Antonio: Industrial space hard to fill in second quarterREOC San Antonio: Industrial space hard to fill in second quarterhttps://www.recenter.tamu.edu/news/newstalk-texas/?Item=174152017-08-10T05:00:00Z2017-08-10T19:00:00Z

​​​​​​​​SAN ANTONIO – ​​The local industrial market had 720,719 sf of positive net absorption in the second quarter, but REOC San Antonio called that figure "somewhat misleading."

New construction delivered the Carrier Corp building (850,000 sf) at 16407 Applewhite Rd. in the south sector.

“The considerable gain from this​​ one preleased facility concealed some sizeable vacancies,” said Kimberly Gatley, senior vice president and director of research for REOC San Antonio.

Offsetting tenant move-ins w​ere several large move-outs from warehouse facilities in the northeast sector. KLN Steel Products left nearly 211,000 sf at BAMC Heights Distribution Center. Also vacated was a combined 211,000 sf in two buildings that previously stored frac sand for drilling activity in the Eagle Ford Shale.​

Despite the conflicting activity, the market ended the second quarter in the black. However, the addition of more than 1.7 million sf of new space counteracted those gains and pushed the citywide vacancy rate to 11.8 percent compared with 10.4 percent in the previous quarter and 7.3 percent recorded in the same quarter last year.

The dominant distribution warehouse category had 641,608 sf of positive net absorption. The service center/flex market had positive 79,111 sf. The citywide vacancy rates for distribution warehouse facilities loosened to 12.6 percent compared with 11 percent last quarter while the vacancy rate for service center/flex properties improved to 8.4 percent compared with 8.9 percent.

The average cost for renting local distribution warehouse space was $4.67 per sf on an annual, triple net basis. The average cost for service center/flex space was $10.15.

Several sizeable industrial projects are moving through the development pipeline and expected to deliver nearly 900,000 sf in the coming year.

REOC San Antonio
San Antonio-New Braunfels
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