July 12, 2019
Weitzman’s mid-year report for retail in San Antonio shows an increase in both occupancy and construction, thanks to demand. Marcus Shaffer, senior vice president with Weitzman’s San Antonio office, discussed the current market, the boost in building, and forecast for the remainder of the year.
Q. What are we seeing in the San Antonio retail sector at this time?
A. San Antonio’s retail market right now is about 94.2%, occupied, up a bit from year-end 2018 thanks to new tenancy for vacancies created by Toys “R” Us and Sears last year. We’ve enjoyed one of the most prolonged period of market health that I can remember, with occupancy of more than 93% over the past five years. And the market has stayed above a healthy 90% since 2010.
Q. What is happening with new construction?
A. For 2019, we expect to end the year with construction that is three times higher than what we saw in 2018. But even with that big jump, it’s still only about 900,000 square feet of new space. And, a third of that is for a single retailer, IKEA, which opened a 289,000-square-foot store earlier this year at Live Oak Town Center. The other new space is for a mix of entertainment, grocery store, discounter and small-shop space; the great majority of that is already leased. Even with the tight market, we expect construction to remain conservative for the foreseeable future.
Q. What do you expect for the remainder of 2019?
A. We expect to see occupancy climb a bit, as the pre-leased new projects come online, and as additional key vacancies are absorbed. In terms of retailer demand, we’ll continue to see leasing from entertainment concepts, large and boutique fitness concepts, medical and dental uses, restaurants, and the like. With the continued outlook for a strong San Antonio economy, along with healthy job and population growth, we expect to see a balanced retail market for the remainder of 2019, and into 2020.
It’s time to register for this year’s Connect Texas Multifamily Conference on Aug. 15! For information and to register, click here.
For comments, questions or concerns, please contact Amy Sorter