After being hit earlier this year with the closures of national retailers such as Circuit City, Mervyn’s and Linens N’ Things, the faltering economy continued to impact the local retail market over the past three months.
Sportsman’s Warehouse vacated its 47,000-sf location at The Legacy after having closed the location at Westover Marketplace last year.
According to the survey of nearly 44.5 million sf of area retail space conducted by NAI REOC Partners, the San Antonio retail vacancy rate climbed to 14.5 percent at the close of second quarter 2009, which is a marked increase from the 11.4 percent vacancy rate recorded a year ago.
The market grew by more than 3.5 million sf last year, but less than 849,000 sf of new retail space has been delivered to the area in the first half of the year with less than 250,000 sf expected to come online by year’s end.
In 2Q 2009, nearly 677,000 sf of new retail space came online led by the addition of Woodlake Crossing (305,231 sf) featuring Target, Ross Dress for Less, PetCo, Best Buy and several others.
Aside from the gains produced in the newly completed centers, activity within existing centers overall remains relatively slow, but leases are still being signed. Renewals and extensions led second quarter activity including Big Lots (29,875 sf) at Bandera Festival.
The impact of higher-priced new projects floated up average rental rates and now that the market is feeling the impact of a sluggish economy, quoted rental rates have begun to reflect the downturn. At the close of 2Q 2009, the citywide average quoted triple net rental rate for retail space in San Antonio inched up to $18.33 per sf annually.
Compared to a year ago, the average rent is up $0.86, a 4.9 percent increase, but the $0.10 gain over last quarter registers a growth rate of less than 1 percent.
From the TAMREC
Attorney Trey Wilson - RL Wilson Law
Trey Wilson --Named By Scene in SA Magazine As One of San Antonio's Best Real Estate Litigation Attorneys -- September 2008 -- As voted on by peers