SAN ANTONIO (NAI REOC) – New leases and expansions generated 458,873 sf of positive net absorption in third quarter 2012, according to NAI REOC’s survey of more than 46.7 million sf of area retail space.
“San Antonio-area retail properties continued to experience widespread activity from new and expanding retailers in the third quarter, which gave the local retail market a much-needed bounce,” said the local commercial real estate company’s Senior Vice President and Director of Research Kim Gatley.
In all, third quarter activity raised the year-to-date total net absorption to 751,586 sf — more than double the amount recorded through the same period last year at this time. Nearly all of it was in existing space rather than newly constructed centers.
The citywide vacancy rate improved to 11.8 percent, down from 12.7 percent last quarter and 12.6 percent a year ago.
The average citywide quoted triple net rental rate remained relatively stable compared with last quarter at $18.37 per sf per year, up $0.02 compared with last quarter and $0.20 compared with the same quarter last year for a modest annual increase of 1.1 percent.
“The recession has forced retailers to become more creative and flexible,” said Gatley. For example,some retailers are combating the financial pressures by moving forward with smaller store designs. Taking advantage of technology, many retailers are using online and mobile promotions to draw customers into their stores. Although many mom-and-pop stores continue to struggle, many larger retailers have started to see more consistent growth, which is reflected in the larger retail centers around town.
Looking ahead, speculative construction is expected to remain limited through the end of the year and heading into 2013.