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Market Report

San Antonio Retail Market Report

2024 Investment Forecast

Outlying Counties Need Supply-Side Relief,
Urban Core Rents Surge as Lifestyles Normalize

Retail vacancy settles at a new equilibrium. More than half of the metro’s 10 largest submarkets by stock had vacancy rates below 3 percent entering this year, reflecting a universally strong sector. Locations with the tightest rates include several outlying suburbs experiencing robust household creation, and as a byproduct tenant demand for retail space, putting a squeeze on available supply amid a dearth of recent development. Atascosa, Comal, Guadalupe, Kendall and Medina counties combined for less than 500,000 square feet of vacant stock at the end of last year, supporting annual rent growth above 10 percent in three of these five submarkets. Aside from Comal County, the call for new supply will go unanswered this year, however, with the four other areas pooled together constituting less than 50,000 square feet of 2024 deliveries. Retail construction as a whole in San Antonio is decelerating. This year’s slate is on track to be the smallest since at least 2007, allowing net absorption to exceed new supply for the third time in four years. As a result, vacancy will return to 2022’s record-setting low of just 3.8 percent, supporting a pace of rent growth that nearly doubles the historic average. 

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