posted on March 25, 2011 00:15
The 2011 forecast for San Antonio’s retail sector, according to real estate brokerage firm Marcus & Millichap: a rise in employment, a rise in effective rents, and declines in construction and vacancy figures.
It doesn’t get much better than that.
Some more good news: San Antonio moved up three places on Marcus & Millichap’s National Retail Index (NRI) — which ranks the country’s largest 44 metros according to various supply and demand factors that will impact these retail markets over the coming 12 months.
In 2010, San Antonio was ranked No. 17 on the Phoenix-based firm’s index. A year later, the Alamo City now holds the No. 14 spot.
Granted, the wind was kicked out of San Antonio’s sails slightly with the recent news that the city shed 16,500 jobs between December 2010 and January 2011. At the end of the day, however, the Alamo City is on track to expand payrolls by 20,000 workers over the course of 2011 — a gain of 2.4 percent, Marcus & Millichap reports.
Those employment figures earned San Antonio a spot on Marcus & Millichap’s list of the 10 markets posting the highest expected 2011 employment growth. Also making their way onto that list were fellow Texas cities Austin, Dallas/Fort Worth and Houston.
In terms of new construction, there’s not a whole of dirt getting kicked up these days. By year’s end, San Antonio is expected to deliver 300,000 square feet of new retail space — marking the lowest level of completions since 1999, Marcus & Millichap states.
But that lack of construction — combined with job growth — bodes well for owners looking to shore up their existing retail centers in the Alamo City. Retail vacancy figures are expected to drop to 8.5 percent by year’s end — or to what Marcus & Millichap calls “pre-recession levels.”
The last few years have been less than exciting when it comes to the investment side of retail, but that is slated to change in 2011 as well. “As retail operations improve,” Marcus & Millichap contends, “cash-heavy buyers ... will leave the sidelines to acquire high quality Class B assets in core areas.”
Those core area will likely include properties in the North Central, Far North and Northwest submarkets. According to data compiled by locally based NAI REOC Partners, the above-mentioned submarkets not only boast some of the highest levels of retail inventory, but the lowest vacancy figures as well.
San Antonio Business Journal, 3/11/11, Tricia Lyn Silva