SAN ANTONIO – Local industrial development activity continued to flourish at the start of the year, exceeding a high-water mark of 6.7 million sf under construction for the second consecutive quarter, even with 2.6 million sf of deliveries.
According to JLL’s local 1Q2023 industrial report, a comparable level broke ground in the first quarter, 75 percent of which was concentrated in the Northeast submarket. While the pipeline has been dominated by more sizable buildings averaging 191,409 sf, Eisenhauer Point in the Northeast submarket will bring two new buildings online with footprints below 50,000 sf.
Total vacancy among buildings smaller than 50,000 sf has historically fallen below the marketwide average, sitting at 5.8 percent as of the first quarter, due to the prevalence of tenants with 20,000 to 50,000 sf footprints.
Given the demand seen across the city, absorption remained strong in the first quarter, exceeding one million sf. Approximately 86 percent of the total net absorption was captured by buildings delivered within the past three years, as there continues to be an appetite for new supply.
Although the net occupancy gains were not enough to outpace new deliveries, resulting in a 1.4 percent uptick in vacancy from fourth quarter 2022, there is currently enough demand in the market to fill the available space remaining in recent deliveries and projects currently under construction.