San Antonio industrial space tight; rents push up

SAN ANTONIO – If you have not noticed that San Antonio’s industrial real estate sector is on the upswing, you are not alone.

Local real estate observers know San Antonio has a strong housing market, a healthy office building occupancy rate and a high retail lease rate.

Likewise, the average San Antonio resident can see that homes are selling better and few office and storefronts are vacant.

Yet fewer people have occasion to see indicators that the industrial space in San Antonio is also doing well.

Nevertheless, one could say industrial space in San Antonio is doing better than the residential, office and retail real estate markets.

Consider that San Antonio’s vacancy rate for industrial space is 7.7 percent — better than the overall office vacancy rate at 15.9 percent, according to CBRE San Antonio.

The industrial space vacancy rate is lower than the retail vacancy rate of 8.6 percent, according to the latest survey by The Weitzman Group and Cencor Realty Services.

Second, consider that rent for San Antonio’s industrial space is at near-record levels that have not been seen since 2008. In late 2014, the average rent rate was $7.23 per sf. Rental rates had not gone above $7 in San Antonio since 2010.

The highest rent for industrial space is in northwest San Antonio at $9.66 per sf. At the end of 2014, more than 650,000 sf of industrial space was under construction.