The figures come from a 2001 market analysis compiled by Kim Gatley, director of market research for REOC Partners Ltd. Because of the slowing economy, the vacancy rate had reached 18.2% by the end of the third quarter. "The vacancy rate rose only one point from the third quarter to the fourth, alleviating fears that the market would suffer immediate and severe losses" in the aftermath of the Sept. 11 attacks and a slowdown in national manufacturing, she said.
Almost 1.2 million sf of new industrial space was delivered in 2001. More than 622,000 sf came from speculative building completed during the year and the rest from class A space put on the market at KellyUSA, the former US Air Force base in the south submarket. Without the KellyUSA space, the citywide vacancy rate would be 14.25%.
For the distribution-warehouse market, average rents were flat citywide, finishing at $3.96 per sf compared to $3.97 per sf in 2000. Developers completed three warehouse-distribution projects in 2001, adding 282,000 sf to the market. Currently, 232,000 sf of such space is under construction. The projects include the Alamo Downs Distribution Center II in the northwest submarket and two buildings at Green Mountain Business Park in the north submarket.
Average citywide rents in the service center-flex market rose in 2001 to $8.61 per sf compared to $7.67 per sf in 2000. Although the sector had net absorption of more than 260,000 sf during the year, the vacancy rate rose to 23% from 15.5%. The increase came from the addition of KellyUSA office center 171, which added 450,000 sf to the market, all but 32,000 sf of it vacant.
The San Antonio market should rebound this year, John Greg Turcotte, REOC partner and director of industrial services, said in the report. "The combination of the relatively stable San Antonio economy, the limited product in the development pipeline and the fact that companies are beginning to 'unfreeze' capital budgets, all contribute to a positive overall outlook," he said.
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