San Antonio’s 40.1-million-square-foot warehouse/ distribution space market was flat during the second quarter of 2012. The vacancy rate was unchanged at 8.7%, still well below U.S. average of 12.7%, and both the average asking rent and the average asking rent were unchanged at $4.69 psf and $4.32 psf, respectively. The effective average was unchanged from a year earlier, but the vacancy rate was down 200 basis points. Subsequently, the former increased a penny and the latter fell 10 basis points in July.
In July, a 250,000-square-foot warehouse/distribution project for Glazer’s Distributors broke ground in Northwest San Antonio, but completion is not expected until next year. Reis predicts the vacancy rate will edge down to 8.5% at year-end 2012 and 8.2% at year-end 2016, as annual net absorption generally runs from 200,000 to 300,000 square feet. Following rent gains of around 1.0% in 2012, gains of 3.0% to 4.0% per year are forecast.
The 8.8 million-square-foot Flex/R&D market was stronger in the second quarter, but not by much. The quarter saw the vacancy rate fall 20 basis points to 8.8%, down 190 basis points from a year earlier. The average asking rent edged up 0.1% to $7.77 psf, but the average effective rent managed a 0.7% gain to $7.08 psf, respectively. Rents were unchanged by both measures in July, but the vacancy rate slipped another 10 basis points. A year-end rate of 8.6% is forecast, with only marginal improvement thereafter as net absorption typically runs below 60,000 square feet per year. Rents are expected to rise by 1.3% asking and 1.4% effective in 2012, and by 2.5% to 3.5% per year thereafter.
“The citywide vacancy rate for industrial properties has tightened to 10.3% as of June 30,” according to NAI REOC as cited by the Business Journal. “The vacancy rate was at 14.0% in the second quarter of 2011 and at 12.0% in the first quarter of this year.” The average quoted rental rate was $5.62 psf.