REOC characterizes the San Antonio retail market and its overall economy as stable.While the third quarter showed a net absorption, the first nine months of 2002 show a negative absorption of 278,969 sf, according to REOC. More than 300,000 sf of the negative absorption was in the north part of San Antonio, which had a vacancy rate of 15.4%. The north had a positive absorption of 104,596 sf in the third quarter. The CBD and south part of town absorbed 23,079 sf for the year and 7,555 sf in the third quarter.

The average rent in the overall market rose to $13.50 per sf from $13.35 per sf at the beginning of the year, according to REOC. In the north area, the average increased to $13.72 per sf from $13.64 per sf and rose in the CBD and south to $11.30 per sf from $10.46 per sf.

The market was hit earlier this year when Boise, ID-based Albertsons Inc. closed 23 grocery stories in San Antonio, putting 1.3 million sf in the dark. San Antonio-based H-E-B quickly claimed five stores and two others were purchased for non-grocery uses. Another 15 of the Albertsons stores are under contract to a Dallas investment group in a deal that should close by the end of the year, said Kimberly Gatley, REOC's research director. "This transaction could vastly improve the retail market picture over the next couple of quarters as activity unfolds," she said.