Marcus & Millichap

San Antonio Retail Market Report

San Antonio Metro Area, Third Quarter 2017

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Lull in Construction, Steady Rent Growth Stoke Buyer Competition

Strengthening local economy spurs demand for more shopping options. Retail space demand is on the rise across San Antonio as construction slows and vacancy reaches a new low. Employers have added more than 80,000 workers to payrolls over the last three years, many in higher-paying white-collar roles, contributing to retail sales that outpaced the nation at midyear. Rising employment numbers are spurring steady household growth as more than 15,000 households are anticipated to be formed this year. Retailers are responding to the growing need for good and services by expanding across the metro, bringing more dining options, discounters and grocery stores to the area this year. Much of the new space has already been leased though, driving more leasing activity to existing properties in the future.

Growing population makes the case for retailers to sign new leases. Local grocer HEB is in expansion mode, adding a handful of stores to the area this year and last. Corporate giants Walmart, Starbucks, CVS, Taco Bell and Dollar General are following suit, accounting for a large portion of new construction. The majority of this year’s deliveries are rising in the Northwest and North Central submarkets, areas with vast swaths of housing, led by two strip centers along Loop 1604.

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