Q2 2022 Retail Report: San Antonio
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
San Antonio’s retail space market continued to expand in the second quarter of 2022, with the city adding multiple shopping malls as well as hundreds of new retail storefronts.
Overall, retail space vacancy was near pre-recession levels and rents remained stable, while employment in the retail sector grew to pre-recession levels and wages increased significantly.
This is good news for both tenants and landlords in San Antonio’s vibrant retail real estate market.
Retail Sector Performance in San Antonio in Q2 2022
Overall, San Antonio’s retail sector saw strong performance in the second quarter of 2022.
Rents for retail space continued to trend upward, and vacancy rates remained low.
Inflation was a major factor affecting the sector’s performance, as it caused prices for goods and services to increase.
But despite these challenges, retailers in San Antonio were able to maintain strong sales and profitability.
Looking ahead to the rest of the year, we expect the retail sector in San Antonio to continue to perform well.
San Antonio Retail Performance by the Numbers
San Antonio’s retail sector continued to grow in the second quarter of 2022, with sales rising by about 3.5% quarterly.
This growth was driven by a 5.3% increase in average San Antonio retail space rents, which offset a 1.8% decline in the number of retail establishments in the city.
Despite this positive performance, inflationary pressures are starting to affect the sector, with the cost of goods and services rising by about 2.0% during the quarter.
These trends are expected to continue in the coming quarters, with sales forecast to grow by 3.2% in Q3 and 3.1% in Q4.
The Pacing of Retail Space Rents in San Antonio
In the second quarter of 2022, retail space rents in San Antonio continued to rise at a moderate pace.
The average asking rent for retail space in San Antonio was about $17.22 per square foot, an increase of about 4% from the previous quarter.
The retail sector in San Antonio has been one of the strongest performing sectors in the city, due in part to the city’s strong population growth.
Inflation has been a major factor affecting the performance of the retail sector in San Antonio as well, as it has caused prices for goods and services to increase.
Despite this, the retail sector is expected to continue to perform well in the future, as the city’s population continues to grow.
How is inflation affecting San Antonio’s retail performance?
Inflation has been on the rise in San Antonio, and this is affecting retail sales and commercial real estate investments. Prices for goods and services are rising, which is causing consumers to cut back on spending.
This is especially true for discretionary items like clothing and electronics.
Retailers are feeling the pinch as well, as they are having to pay more for inventory. This is likely to continue in the short-term, as inflationary pressures show no signs of abating.
In the long-term, however, San Antonio’s retail sector is expected to continue to grow, albeit at a slower pace than in recent years.
Emerging Trends in San Antonio’s Retail Sector
In the second quarter of 2022, we’ve seen a continued trend of increasing retail space rents in San Antonio.
This is due to a number of factors, including population growth and the influx of new businesses to the city.
Additionally, San Antonio’s vibrant cultural scene has led to an increase in tourism dollars and spending on leisure activities.
However, with inflation on the rise, prices are also rising across all sectors of the economy, impacting these trends in unpredictable ways.
As such, our current projections for 2022 show that while rent rates will continue to rise at an increased rate from previous levels due to supply constraints, prices for goods may begin to level off as people choose not to spend as much money when their earnings do not keep up with inflation.
New Commercial Real Estate Development in San Anontio’s Retail Market
Some new, notable commercial real estate development projects in San Antonio include:
- H-E-B has announced plans to build a new $43 million distribution center just outside of San Antonio. The new facility will bring a large number of new jobs to the area.
- Target is also planning to open a new store in San Antonio.
These companies are just a few of the many that are relocating to or expanding in San Antonio, Texas.
Notable Retail Space Acquisitions in San Antonio in Q2 2022
In Q2 2022, San Antonio’s retail sector continued to experience strong growth, with several notable acquisitions.
Most notably, Walmart acquired two new retail spaces in the city, one in the Northside neighborhood and one in the Southside neighborhood.
These acquisitions come as Walmart looks to expand its presence in San Antonio.
In addition, Target also acquired a new retail space in the city, in the Northeast neighborhood.
This is Target’s first acquisition in San Antonio and signals their interest in expanding into the city.
Lastly, Kohl’s acquired a new retail space in the Westside neighborhood. This is Kohl’s second acquisition in San Antonio and indicates their continued commitment to growing their presence in the city.
Occupancy Rates in San Antonio’s Retail Sector
The second quarter of 2022 was a strong one for San Antonio’s retail sector, with occupancy rates rising to 95.6%.
This can be attributed to an increase in demand for retail space that is outstripping supply.
With occupancy rates above 95%, retailers are hesitant to expand and continue to seek new space.
This has resulted in major rent growth within many of San Antonio’s urban centres, with annualised rent growth over 10% year-on-year across many locations.
Takeaways for San Antonio Retail Space Investors
Investors interested in San Antonio’s retail space should consider the following:
- The retail sector in San Antonio is fairing well, with San Antonio retail space rents increasing by 4% in the second quarter of 2022.
- Inflation is starting to affect the sector, with prices for goods and services rising by 2%.
- Despite this, the sector is still performing well, with vacancy rates remaining low at around 4.4%.
- Forecasts for the future performance of the retail sector are positive, with space rents expected to continue to rise.
- This is good news for investors in San Antonio retail space, as their investments will continue to appreciate in value.
- However, investors should be aware of the inflationary trends affecting the sector and factor this into their investment strategy.
Do your research, stay diligent, and happy investing.
Methodology
All figures presented in this article are based on MyEListing.com’s commercial real estate listing data in corroboration with other freely available data and information covering the commercial real estate industry.
List & Browse Commercial Real Estate in San Antonio for Free on MyEListing.com!
You can list and browse commercial real estate in San Antonio for free right here on MyEListing.com.
Simply sign up for a free account and get unlimited access to accurate local market intelligence, customized property type alerts, comp software, and more.
Other recent articles
Article Search
Share
All Article Categories
