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Q&A With Weitzman’s Marcus Shaffer: San Antonio Retail Definitely Healthy
In recent days, Weitzman released its 2018 report for Dallas, also releasing a similar report for San Antonio. Marcus Shaffer, Weitzman Senior Vice President, helped clarify some of the data reported. The San Antonio MSA has a market inventory of 45.8 million square feet.
Q. How would you classify the San Antonio retail market?
A. As of year-end 2017, the market posted an occupancy rate of 94%, which definitely qualifies as healthy. We’re benefiting from a population growth, a growing single- and multi-family residential market, a strong job market and overall economic stability. Most importantly for retail occupancy, demand is steady at a time of extremely limited retail construction.
Q. You compared the current market to the one from 2007. How do things look today, compared to a decade ago?
A. A decade ago, our economy was in a similar positive cycle. Retail occupancy was healthy at 91.2%, on an inventory of 33.9 million square feet, but notably below the current 94% mark for an inventory of 45.8 million square feet. By any measure, our market is stronger and healthier.
Q. What’s going on with construction?
A. Last year’s retail construction of approximately 360,000 square feet was extremely low, especially for a strong market. However, our existing retail centers benefit from this low-construction environment, since the lack of new space drives leasing demand to consider vacancies. This year appears to be another year of extremely limited deliveries. Few major projects are on the books. Activity will ramp up in a big way in 2019, though, with major centers like The Shops at Dove Creek, at Potranco Road and Loop 1604. The project could include as much as 500,000 square feet of retail space.
Most notably, 2019 will also be the year that South Texas gets its first location of famed international retailer IKEA. IKEA will serve as the anchor for Live Oak Town Center, which will bring more than 800,000 square feet to 111 acres at the southwest quadrant of IH-35 and Loop 1604 in Live Oak.
Today’s strong balance between supply and demand means we should see the market perform well in 2018 and beyond.
For comments, questions or concerns, please contact Texas Commercial Real Estate News Editor Amy Sorter
