NAI Partners on Industrial’s Slight Pullback

The San Antonio industrial market pulled back somewhat in Q4 2017, with the overall vacancy rate increasing to 6%. The metric represents a 50-basis-point (bps) increase both quarter over quarter and year over year. According to NAI Partners, net absorption was at a negative 76,705 (versus the 1-million-square-foot positive net absorption from Q3 2017).

The average asking rate held steady for Warehouse/Distribution and Manufacturing space, though Flex space ended the year at $9.23, a drop from the $10.40 reported in Q1 2017. Meanwhile, leasing activity slowed in Q4, totaling 822,000 square feet, versus the one million square feet from Q3.

There is currently 952,664 square feet under construction, with 67% of the space in the Northeast submarket. Real Capital Analytics data reported year-to-date industrial sales volume in the region at $415.5 million, a year-over-year increase of 44.7%.

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