Industrial Toyota opened its new manufacturing plant in the third quarter, but extensive supply has slowed the recovery of San Antonio’s multi-tenant non-manufacturing industrial space market. The vacancy rate began 2006 at 10.5% after a 30 basis point gain in 2005. The average asking rent and the average effective rent began that year at $4.32 psf and $4.13 psf, respectively, after each rose just 0.5% the previous year.

Retail San Antonio’s retail neighborhood and community center market had a decent third quarter of 2006 ahead of a surge of new supply in the fourth quarter. With no new supply, the vacancy rate fell 20 basis points to 9.3%, Reis reports, and is up 80 basis points from the third quarter of 2005. The average asking rent increased 1.5% to $14.26 psf while the average effective rent rose 1.7% to $12.79 psf. The year-over-year gain is 2.3% by both measures.

Office The San Antonio office market is improving rapidly. In the third quarter of 2006, strong net absorption and an absence of new supply pushed the vacancy rate down 180 basis points to 15.4%, also 180 basis points lower than the third quarter of 2005. The average asking rent rose 1.1% to $17.71 psf, while the average effective rent increased 2.1% to $14.91 psf. The year-over-year gains are 3.7% and 5.9%, respectively.

Multi-Family Supply and demand grow in tandem in the San Antonio apartment market, with vacancy fluctuating a narrow range and rent steadily increasing. In the third quarter of 2006 the vacancy rate fell 20 basis points to 6.2%, Reis reports, down 50 basis points from the third quarter of 2005. The average asking rent rose 1.1% to $654 per month, while the average effective rent increased 0.8% to $614 per month. The year-over-year gains are 2.7% and 2.3%, respectively.