Q2 IN REVIEW

San Antonio’s industrial market experienced increased activity in Q2 2026, with positive net absorption and higher leasing. The market recorded 873,488 sq. ft. of net absorption during the quarter, up 48.6% from the prior quarter. The vacancy rate dropped 37 basis points to 11.3%. Leasing activity increased 21.6% quarter-over-quarter and fell 47.3% annually. The construction pipeline stands at 4.0 million sq. ft., up 38.4% over the quarter. Rental rates increased 4.8% quarterly to $9.22 per sq. ft.

SUPPLY & DEMAND

KEY MARKET INDICATORS

MARKET OVERVIEW

SAN ANTONIO ECONOMIC UPDATE  

San Antonio added 4,800 jobs over the year ending May 2026 (+0.4%), for total nonfarm employment of 1.20 million. Transportation and warehousing was the standout (+3,800, +8.0%), alongside retail trade (+4,200, +3.4%) and professional and business services (+3,000, +1.9%); leisure and hospitality (−1,700) and information (−1,300) declined. Industrial-linked employment rose 2,600 jobs (+1.8%), the strongest industrial employment growth of the five metros. Unemployment was 3.8% in April, up 30 basis points year over year.

The metro’s $150.3 billion real GDP (2023) grew 4.6% year over year. Population reached 2.76 million with median household income of $78,112 (+6.7%). Home prices rose 1.4% (Q1 2026), the firmest of the Texas majors, while permits fell 11.9% year-to-date to 4,653 units.

NET ABSORPTION UP IN Q2 2026

Net absorption—move-ins minus move-outs—totaled 873,488 sq. ft. in Q2 2026, up 48.6% from 587,711 sq. ft. in Q1 2026. By subtype: Distribution 338,897 sq. ft., Data Center 279,730 sq. ft., Warehouse 174,043 sq. ft., Light Distribution 137,896 sq. ft., Manufacturing -109,382 sq. ft., Service 69,009 sq. ft., Showroom -55,059 sq. ft., Refrigeration/Cold Storage -19,000 sq. ft., Light Manufacturing 10,919 sq. ft., R&D 8,809 sq. ft., Food Processing 0 sq. ft., Telecom Facility 0 sq. ft., Truck Terminal 0 sq. ft.. At the submarket level, the South submarket recorded the strongest gain at 530,868 sq. ft., while Guadalupe County posted -322,500 sq. ft.

LEASING ACTIVITY UP QUARTERLY

Quarterly leasing velocity—new leases and renewals—rose 21.6% over the quarter to 1.2 million sq. ft., but fell 47.3% annually. By subtype: Warehouse 670,428 sq. ft., Distribution 302,505 sq. ft., Manufacturing 89,678 sq. ft., Light Distribution 57,191 sq. ft., Light Manufacturing 18,001 sq. ft., Showroom 15,994 sq. ft., R&D 9,456 sq. ft., Data Center 0 sq. ft., Food Processing 0 sq. ft., Refrigeration/Cold Storage 0 sq. ft., Service 0 sq. ft., Telecom Facility 0 sq. ft., Truck Terminal 0 sq. ft.. Notable leases signed in Q2 2026 include JCB Inc’s 198,000 sq. ft. lease at Freeport Business Centre and Viant’s 131,290 sq. ft. renewal at Alamo Ridge Business Park III.

VACANCY RATE DROPS 37 BASIS POINTS

The overall vacancy rate fell to 11.3% in Q2 2026, down 37 basis points from 11.7% in Q1 2026, and down 27 basis points year-over-year. The direct vacancy rate is 10.7%, and the total availability rate is 12.1%. Northeast posted the highest vacancy rate at 17.1%, while Northwest remained tight at 7.1%.

CONSTRUCTION PIPELINE UP AND DELIVERIES DOWN

The construction pipeline rose to 4.0 million sq. ft., up 38.4% from 2.9 million sq. ft. in the previous quarter and up 25.9% from a year ago. Significant construction remains concentrated in South (1.4 million sq. ft.) and Northeast (896,396 sq. ft.). Deliveries decreased 72.6% quarterly to 279,730 sq. ft.

INVESTMENT SALES TRENDS

Over the past year, 34 industrial and flex transactions totaling 7.5 million square feet closed in San Antonio. Notable trades include Circle Industrial’s acquisition of the 394,232-sq.-ft. I-35 Logistics Center from Westcore for $45.5 million ($115/SF), fully leased at closing, and EQT Real Estate’s purchase of the 431,739-sq.-ft. Selma Industrial Park Building III from Robinson Weeks Partners for $42.0 million ($97/SF) at 43.8% leased. Portfolio and multi-building sales represented 52% of volume.

User-level trades added further volume, including Amazon’s purchase of the vacant 560,500-sq.-ft. Rosillo Creek Industrial Park Building 1 from Milam Real Estate Capital and Coca-Cola Southwest Beverages’ acquisition of the 331,025-sq.-ft. Northeast submarket bottling facility it already occupied.

RENTAL RATES UP

San Antonio’s average asking rent (NNN) rose to $9.22 per sq. ft., up 4.8% from $8.80 in Q1 2026. By subtype: Refrigeration/Cold Storage $18.00 per sq. ft., Showroom $13.62 per sq. ft., R&D $13.42 per sq. ft., Light Distribution $12.15 per sq. ft., Light Manufacturing $10.99 per sq. ft., Service $9.36 per sq. ft., Warehouse $9.19 per sq. ft., Distribution $8.18 per sq. ft., Manufacturing $6.41 per sq. ft.. Submarket leaders included North Central at $14.71 per sq. ft., while Northeast trailed at $7.60.