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Market Report

San Antonio Retail Market Report

3Q 2022

Vacancy on Track to Undercut Pre-Pandemic Lows;
Vendors Broaden Footprints via Outer Suburbs

Retail space demand bounces back emphatically. After pandemic headwinds pushed retail availability to a peak of 5.6 percent at the midpoint of last year, the market has gone on to post four consecutive quarters of very strong demand. From July 2021 through June 2022, net absorption totaled nearly 2.8 million square feet, compared to a supply addition of less than half that amount over the same period. This was also the strongest four-quarter stretch for net absorption since 2015-2016. As a result, the metrowide vacancy rate has already dropped under the 2019 average by midyear, and has the momentum to notch a decade-plus low by the end of 2022. The surge in leasing is coming from a diverse collection of industries. Some local businesses are opening new locations in fast-growing areas of the metro, while many national and regional retailers are eager to enter the market, enticed by the expanding consumer base.
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