CBRE has released the Q3 2017 San Antonio Industrial MarketView, which is available for download at cbre.com/research. Below is a summary of key Q3 highlights.
Class A product alone registered near 300,000 sq. ft. of net absorption as tenants continued seeking higher quality product. Our data showed 98% of newly vacated space in Q3 2017 was attributed to non-Class A product.
Overall, market-wide net absorption pushed year-to-date totals to just shy of 1.0 million sq. ft.
A relatively small volume of speculative deliveries coupled with healthy net absorption pushed the overall vacancy rate to single digits once again. The 30 basis points (bps) drop to 9.7% places the market more than a percentage point below its 10-year average of 10.8%. Class A saw a dip of 1.9 percentage points, to 10.7%, in response to strong leasing in the last 90 days.
Weighted average asking rents for industrial (warehouse) remained steady compared to last quarter with variations below 2.0%. Within these numbers, Class A was also steady, but anchored rents at $5.20 per sq. ft., $0.57 above Class B assets, in Q3 2017. Flex product asking rents saw an escalation of $0.18, assisted by new construction deliveries, after registering a slight drop in Q2 2017.
Three speculative flex/R&D properties totaling 112,704 sq. ft. delivered this quarter in the Northwest at an occupancy of 14.0%. The warehouse market registered no deliveries, however, construction continued on seven projects totaling 786,000 sq. ft. A new speculative project measuring 350,000 sq. ft. broke ground in South San Antonio where Class A vacancy sat at 2.1%— bringing the total pipeline to 1.3 million sq. ft. which will deliver through summer 2018.
San Antonio's regional economy continued expanding and its employment growth accelerated with 16,100 seasonally adjusted net jobs year-to-date and 25,000 added year-over-year in August 2017. The seasonally adjusted metropolitan unemployment rate continued below the state average at 3.6% as of July 2017.
To learn more about CBRE Research, or to access additional research reports, please visit the Global Research Gateway at www.cbre.com/research.
More Info: http://www.cbre.com/research