About 94.1 percent of the area’s retail space was occupied at midyear, according to a report by Weitzman, a Dallas-based retail real estate firm with a local office.
That’s up —slightly — from 94 percent at the end of 2021 but down from 94.5 percent at the end of 2019, prior to the pandemic.
Weitzman’s figures are based on its review of about 48.3 million square feet of space at local shopping centers that contain 25,000 square feet or more.
The paucity of new space is helping keep existing malls full, as new tenants are filling storefronts vacated by closed businesses.
Demand is steady for small spaces for restaurants, boutique fitness studios, and medical and beauty businesses, Weitzman said in its report.
It expects occupancy to remain stable or rise in the months ahead, buoyed in part by job gains.
“The market remains one of the healthiest in recent memory, although we are watching issues closely such as rising interest rates, construction costs, inflation and other factors that may lead to a slowdown,” Weitzman said in its report. “However, the San Antonio economy remains healthy, with key industries such as tourism seeing a return to near pre-pandemic health, which benefits retail.”
EVO Entertainment Group plans to open an entertainment complex at South Park Mall.
MICHAEL CAGLE cagleart.com
New stores, theaters
Entertainment and targeted retail highlight coming openings.
EVO Entertainment Group plans to open a dine-in movie theater, bowling and arcade complex in about half of a former Sears store at South Park Mall.
Pinstack, which operates bowling and entertainment complexes, plans to open a location in another former Sears store, this one at Park North Shopping Center.
Santikos Entertainment took over two former Alamo Drafthouse Cinemas locations — in New Braunfels and at Westlakes near Loop 410 and Texas 151.
In April, Santikos closed its Bijou theater, a major tenant at Wonderland of the Americas. The nonprofit that runs Woodlawn Theatre is moving into that space.
Fitness Connection is opening a gym in the rest of the space. There are also plans for an Ojos Locos Sports Cantina location in a former Sears auto center at the mall.
Popshelf, a new brand of stores by Dollar General targeting wealthier shoppers, is filling a former Walgreens store at 4351 Thousand Oaks Drive and a space at The Rim, according to Weitzman.
Some new restaurants have added locations or plan to do so, including Maple Street Biscuit Co., Rusty Taco, Carriqui, La Catrina Mexican Bakery, Nekter Juice Bar, Black Bear Diner, Wayback Burgers, Bombshells and Pluckers Wing Bar.
Floor & Decor opened a 79,681-square-foot store and BJ’s Restaurant & Brewhouse opened a 7,630-square-foot location at Live Oak Town Center at Loop 1604 and Interstate 35, which is in Weitzman’s portfolio. A Twin Peaks restaurant and a Black Rifle Coffee Co. shop are also planned at the center.
H-E-B replaced a store at 651 S. Walnut Ave. in New Braunfels with a new supermarket.
A ‘landlord’s market’
Weitzman credits conservative construction among retail developers with helping prevent more vacancies at existing shopping centers.
About 3 million square feet of retail space was built from 2016 to 2020, a decline from 10.2 million square feet constructed from 2006 to 2010. About 384,000 square feet of space at new and expanded shopping centers with 25,000 square feet or more is expected to be added this year. That’s slightly ahead of 2021, at 354,000 square feet, and 2020, at 355,000 square feet. The most recent high point was in 2018, when 868,400 square feet were added.
Weitzman attributed the lack of retail space construction to fewer anchor stores opening, supply chain snags, and high labor and materials costs. “Rents required to economically justify a project can outpace the overall market,” Weitzman said in its report.
At midyear, rents had not changed from the same point in 2021. Average asking rates at the city’s newest and highest-end shopping centers ranged from $26 to $38 per square foot per year for small spaces to the $40s for bigger, end-cap spaces in the first six months of 2022, according to Weitzman.
Rents for Class B properties hovered from $18 to $26 per square foot, and rents for Class C properties ranged from $10 to $16 per square foot.
“I believe it is still very much a landlord’s market right now as demand continues to significantly outpace supply,” said Robert King, senior vice president at Weitzman San Antonio. “Perhaps a mild recession, which many are predicting for 2023, will level things out a bit.”
New retail space in the works includes a two-story project called Napa Oaks, which is planned at Interstate 10 and Starr Ranch Road. It will include 47,500 square feet of restaurants, service businesses, and office and medical space, according to Weitzman.
About 10,000 square feet of additional adjacent restaurant and medical space is also in the works.
H-E-B plans to build a store and e-commerce fulfillment center at FM 1103 and Main Street in Cibolo.
A second phase of the Shaenfield Ranch retail project on the far West Side will include about 54,000 square feet of space, according to Weitzman.
A 24,000-square-foot center with space for small shops is also planned at 8530 Texas 151.
