Positive Steps for San Antonio

The San Antonio market continues to move in a positive direction bucking the national trend of economic downturn. Approximately 1.7 million square feet of retail space has been added to the market since the first quarter of 2007. Michael Jersin, HPI’s retail Project Partner, states "San Antonio continues to enjoy quality retail expansion and we are confident that while development may be slow in other parts of the country, we will continue to move in a positive direction."

Experiencing the majority of development and expansion throughout San Antonio, are the northeast, north central and northwest submarkets. A number of the sites receiving the most attention throughout these areas are infill sites. Park North, formerly known as Central Park Mall, is HPI’s premier infill development. The revamping of this mall is anchored by major retailers including Target, Sears and Alamo Drafthouse, a favorite Central Texas movie theater. Aloft Hotels has also chosen this site for their first hotel in San Antonio. The strong tenant base at Park North is just one of many examples of retailers’ faith in the San Antonio market.

While some national retailers curtail their expansion, others are eagerly proceeding with their growth plans. Target is currently seeing through the construction of four new locations throughout the San Antonio area. In addition, a home grown favorite HEB, is opening two new HEB Plus! locations. Other notable active retailers include JC Penney’s (actively expanding), HomeGood’s, Bass Pro, Dick’s Sporting Goods (entering market), Staple’s (entering market), BJ’s Brewhouse, Vitamin Shoppes, Eddie V’s and Roaring Fork. Texas’ consumers are supporting retail growth through their spending habits, which is evidenced by a 4.7 percent increase in sales tax revenue. Steady consumer spending and retailer expansion are great signs for investors.

Landlords and developers are reaping the benefit of retailers’ expansion as well. The average proposed rental rate has increased .54 cents or 3.4 percent up from the proposed rents of the first quarter of 2007. The proposed increased rental rate is bolstered by the relatively stable vacancy rate in San Antonio. When asked about the local market stability, Michael Jersin notes, “Upon lease-up of our HPI retail product, our partnerships and landlords are enjoying very little tenant fallout and strong occupancy rates in the HPI shopping center portfolio.” The stability of the San Antonio market, noted by Jersin, is a positive sign for most retailers looking to ride out this recession.