Raub Report: San Antonio Industrial Real Estate Market on Fire for New Growth

September 27, 2019

The San Antonio industrial real estate market has really been on fire lately for new plant announcements.

Investment Realty just scored a big win in the manufacturing arena with the updating of the Toyota plant on Applewhite Road for $391-million. This plant opened in 2006, manufacturing the very popular Tundra truck. Then, it also picked up the Tacoma line when a California plant was closed.

The plant has been running full tilt for years, so, even though demand for Tundra has waned, they are still going at max rate to keep up with demand. Apparently, the Tacoma is going to be moved to a brand new plant in Mexico soon.The updating may be to accommodate another model like the 4Runner, which is now made in Japan, but that is just my speculation.

However, with that size investment, the local plant will continue to be an important viable asset for Toyota and San Antonio. I learned that there would not be a new line built, because that would require an investment over $1 billion.

Then, there is the announcement of Toyota drive-train manufacture, Aisin, which will build a new $400-million plant in Cibolo on IH-10 East at Santa Clara Road and this will employ 900 new workers. To top off a pretty good month, Navistar announced its new $250-million plant on the south side near Mitchell Lake, not far from Toyota’s plant. They will add 600 workers to the San Antonio labor force. So, all combined, these three will add over $1-billion in new plant construction to San Antonio, and 1500 new manufacturing jobs. Then you can be sure that there will be a number of suppliers that will need to build facilities nearby, which will add to this total. This is all really great for our fair city.

You can then add the just completed 1.7-million square foot T.J. Maxx distribution facility built off of U.S. 281 South and Loop 410 South. They are adding 1,000 new jobs. HEB has started on a new 800-acre master planned industrial campus on Foster Road, a mile south of IH-10 East, with their initial 1.6-million square foot facility, their largest logistics building yet.

Our industrial market is already near max capacity, with occupancies near 93% to 94%, with 4.3-million square feet of new development delivered to the market in the past year. If you plat this on a map you will see most of this new action is on the south side, where, in years past the new industrial development has been on the IH-35 Corridor north of San Antonio.

Add to this a number of new residential developments starting on the south side, we see that growth in the San Antonio industrial real estate market is finally becoming more balanced across the city, rather than concentrated on the north side. One reason is these facilities take very large tracts of land, which needs to be flat and not too expensive. Another new announcement that is an exception is PNC Bank’s choosing New Braunfels for a 550 person back office. Not bad, Alamo City, not bad at all!