March 27, 2017
Talk of the Texas economy tends to focus on the great things going on with Dallas or Austin, or Houston’s emergence from its energy slump. The San Antonio-New Braunfels MSA doesn’t often get notice, but much like the larger metros, it is contributing a great deal to the state economy. Connect Media discussed the economy and other topics with CBRE’s Carlos Marquez, who is responsible for oversight of IDI Gazeley’s industrial portfolios in San Antonio and McAllen.
Q. What’s going on with the San Antonio economy these days?
A. San Antonio is doing quite well. We’re seeing a strong, diverse employment and expanding population that continues to drive the economy. Moody’s Analytics and the Bureau of Labor Statistics pointed out that employment surpassed one million jobs for the first time. San Antonio added a total of 21,800 jobs in 2016, which is a nice amount. The Federal Reserve Bank of Dallas showed that job growth in the metro increased by 3.7% in the three months through January 2017. So yes. We are definitely growing here.
Q. How is this impacting San Antonio’s industrial sector?
A. Very positively. The San Antonio industrial market absorbed approximately 1.8 million square feet in 2016, according to CBRE data, and information from Xceligent. That represents six straight years of positive net absorption. Even better, it’s the third time in the past four years that the absorption number topped 1.3 million square feet.
Much of this absorption is being driven by warehouse and distribution centers. More jobs means more people have money to buy things. The retail trade is booming, which means more items are being sold. In addition, many of the goods are coming to consumers through e-commerce. So, we’re seeing expansion in that arena. For example, Berlin Packaging recently expanded its footprint by 50%. It grew its square footage from 64,000 square feet to 96,000 square feet to accommodate its customer base, which also increased.
Q. What does your crystal ball tell you for the rest of 2017?
A. It probably goes without saying that we’re continuing to project industrial growth. Our economy has been picking up, average wages are going up. So is home affordability; that is increasing here in San Antonio, whereas nationally, affordability is decreasing. And, based on the current industrial pipeline, we anticipate there will be more jobs created in the wholesale trade and transportation sectors, plus an increase in manufacturing jobs.
International trade has also had a huge impact on our industrial sector. The San Antonio-New Braunfels region was ranked among the top 25 of U.S. metropolitan exporters, according to statistics from the International Trade Administration and U.S. Department of Commerce. Granted, trade policy is still a work in progress with the current presidential administration. But I don’t see the issue of trade changing too much in the near term.
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