The Alamo City’s industrial market continues to benefit from Eagle Ford Shale activity, according to NAI REOC San Antonio’s second quarter 2012 market report.
Three of the top five largest leases signed in the second quarter were by Chalk Mountain Services, an oilfield services company specializing in transportation of frac sand, an industrial sand used in deep well drilling of oil and natural gas.
Chalk Mountain signed leases at Alamo Downs Distribution Center (50,372 sf), Pan Am Distribution Center (47,183 sf) and Nickase Business Center (40,000 sf).
“It is estimated that frac sand is currently being stored in approximately 650,000 sf of San Antonio warehouse facilities, which has obviously benefitted the local market,” said Kim Gatley, senior vice president and director of research for NAI REOC San Antonio.
But Gatley said the local industrial market isn’t built wholly on shifting sand.
According to the firm’s survey of more than 31 million sf of tracked industrial space, the local market had 250,600 sf of positive net absorption in the second quarter. Year-to-date, local industrial properties had 912,958 sf of positive net absorption.
The citywide vacancy rate tightened to 10.3 percent at the close of the second quarter compared with 11.9 percent last quarter and 14 percent in the same quarter last year.
The average citywide quoted rental rate was up six cents from last quarter to $5.62 per sf per year on a triple net basis, and up nine cents compared with last year at this time for a moderate annual increase of 1.6 percent.
The city’s 24.3 million sf of warehouse space had the majority of leasing activity and absorption recorded in the second quarter, generating 225,776 sf of positive net absorption.
Citywide warehouse vacancy rate improved to 8.6 percent compared with 10.6 percent last quarter and 13.1 percent a year ago.
The citywide average quoted rental rate for warehouse space increased six cents from last quarter to $4.48 per sf, five cents higher than the average rate recorded in the same quarter last year.