Subscribe to Our Research Content

  • This field is for validation purposes and should be left unchanged.

Share

Download the PDF

San Antonio Retail full year 2021 net absorption highest annual total since 2016.


EXECUTIVE SUMMARY

STEADY RETAIL DEMAND
The San Antonio retail market is showing signs of demand improvement, as leasing volume increased in the fourth quarter by 46% to 654,000 sq. ft. compared to Q4 2020 at 449,000 sq. ft. and net absorption—the measure of total square feet occupied in existing buildings, (indicated as a move-in) less the total space vacated (indicated as a move-out) over a given period—of 934,000 sq. ft. in Q4 2021, a 240% increase from a year ago at this time. San Antonio’s retail market has remained resilient, despite the coronavirus pandemic. Vacancies have remained tight, and net absorption has stayed positive for five consecutive quarters. With 814,000 sq. ft. delivered in 2021, 866,000 sq. ft. under construction, and another 3 million sq. ft. of proposed projects that have been announced, although they have not broken ground yet, the demand for retail real estate may continue to outpace supply.

BROAD MEASURES OF SAN ANTONIO ECONOMY LARGELY POSITIVE
The metro’s unemployment rate fell to 4.5% in November, the lowest since March 2020. The state’s jobless rate decreased slightly to 5.2%, and the nation’s rate contracted to 4.2%, also the lowest since March 2020. In the three months ending in November, San Antonio’s labor force expanded an annualized 6.8%, well above Texas’ 3.6% and the nation’s 1.3% gains. The leisure and hospitality sector led growth (24.1%), followed by mining (11.2%), and professional and business services (9.0%). In March and April 2020 combined, 138,332 jobs were lost in the metro as the pandemic hit. As of November 2021, 87.3% of those jobs had been recovered.

San Antonio Retail Q4 Graphs

 


MARKET OVERVIEW

DEMAND OUTPACING SUPPLY
The San Antonio retail market realized net absorption of 934,000 sq. ft. in Q4 2021, bringing full-year 2021 to 1.7 million sq. ft., the highest annual total since 2016. In addition, Q4 was the second consecutive quarter since Q3 2019 that demand outpaced supply. In 2021, a total of 814,000 sq. ft. was delivered to the market, with 82% of that space spoken for. Of the 988,000 sq. ft. still in the pipeline, only about 15% of the space is available.

INVESTMENT SALES TRENDS
Real Capital Analytics data reports that the cumulative monthly sales volume in the greater San Antonio area is at $847.9 million as of December 31, 2021, up over 100% compared to this time last year at $407.5 million. The primary capital composition for buyers in 2021 was made up of 53% REIT/listed and 39% private investors. For sellers, the majority was 39% institutional and 32% REIT/listed investors. A recent noteworthy transaction included Casey Development acquiring the 86,496-sq.-ft. University Bowl property on 6.5 acres at 12332 W. I-10 in November. Casey has proposed to redevelop the site which holds an assessed value of about $3.5 million, the majority of which is its land market value of around $3.1 million, according to the Bexar County Appraisal District.

SAN ANTONIO AREA HOUSING MARKET ENDED 2021 STRONG
According to the San Antonio Board of Realtors home sales are still moving forward in the San Antonio metro area. The metro reported only a 1% decrease in home sales for a total of 3,529 homes sold in December. The average home sales price rose 15% to $363,075 while the median price increased 19% to $311,000. The month closed with 2,784 new listings and 2,642 pending sales. On average homes spent 34 days on the market before selling. Price per square foot increased to $173 a 20% increase from 2020. In addition, San Antonio ranks as Texas’ hottest housing market and at No. 4 in the nation, according to a new study from real estate site Zillow. The report analyzed key indicators from the 50 largest U.S. real estate markets, including anticipated annual appreciation, housing inventory and net new number of home-owning households.


Leta Wauson
Director of Research
leta.wauson@naipartners.com
tel 713 275 9618

We Want to Hear From You

  • This field is for validation purposes and should be left unchanged.