San Antonio Retail Market Report

Vacancy contracts for the third consecutive year. By the conclusion of 2023, San Antonio will have gained a net of over 250,000 new residents across a decade-long span. In-migration is expected to continue long term as the metro sustains an apartment rental cost advantage over other major Texas markets, fueling retail demand. Despite notably high leasing activity in 2022 and robust consumption trends, construction of retail properties in San Antonio will ease in 2023 to its lowest delivery total since at least 2007. A dearth of new supply will place downward pressure on vacancy, marking the lowest annual rate in over 15 years. San Antonio is also the only major Texas market expected to see vacancy compression in 2023. Shrinking availability will facilitate gains in the average asking rent, yet the metro remains the most affordable major market for tenants in the state, drawing retailers looking to lower operating costs and gain proximity to Austin. In particular, suburbs positioned between the two major west Texas markets are situated to see sustained leasing activity and a continuation of last year’s rent growth.