28th Jul, 2010

Invest in Commercial San Antonio TX Real Estate

Retail results for Fourth Quarter 2009 activities in the commercial San Antonio TX real estate arena looked promising for investors.  Large chain retail centers recently posted an annual net gain of 576,964 square feet of commercial retail real estate in San Antonio, for positive net absorption in 2009.  Local retail centers of commercial San Antonio properties also recorded positive net absorption of 262,115 square feet for Fourth Quarter 2009.

Citywide, the vacancy for existing San Antonio retail real estate was down by 0.6 percent from 14.3 for Third quarter 2009 to 13.7, according to a survey conducted by NAI REROC San Antonio.  The survey represented almost 45 million square feet of retail space.

In addition, according to the 2010 Texas Construction Outlook from McGraw-Hill Construction, each of the major metropolitan areas in Texas is expecting growth, including San Antonio at the rate of 6 percent.  Austin real estate leads the pack of Texas cities with an expected 30-percent growth.  Housing starts, however, will dominate.  Statewide, nonresidential construction starts will slip only 1 percent for commercial and industrial starts.

In 2009, speculative development slowed quite a bit in San Antonio.  Less than 1.1 million square feet of new retail space opened up, perhaps adjusting to the record 3.5 million square feet delivered in 2008.  When the market filled up, the vacancy rate increased, driving down rental rates.

According to NAI REOC, “At the close of the Fourth Quarter, the citywide average quoted triple net rental rate retracted 6 cents from last quarter to settle at $17.85 per square foot annually, down 26 cents or 1.4 percent compared with the same quarter last year.”

Nonetheless, the city is luring downtown development.  In an article by the San Antonio Express-News, the city is expanding a waiver program to entice multifamily and commercial developers back to the urban core.  Although the incentives do not pertain to hotel or most retail projects, the city plans to waive its fees, offer 10-year tax abatements, and increase the amounts of the waivers for water-related impact fees on certain developments approved by the city council.

The city is also identifying city-owned properties available for development.  Developers may contact the Center City Development Office to take advantage of these incentives.

For information about relocation and investment in residential and commercial real estate in Hill Country, click here to contact Dale Cook or call 830-997-1035.

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