SAN ANTONIO (NAI REOC Partners) – Consumers are saving more and spending less as evidenced by a 2.2 percent over-the-year drop in San Antonio’s September sales tax allocation.

“Most local retailers seem to be weathering the prolonged downturn but spending habits have changed to focus on needs more than wants,” said Bryan Parman, vice president of NAI REOC Partners.

According to the firm's survey of more than 44.5 million sf of retail space, San Antonio retail properties recorded 45,228 sf of positive net absorption in the third quarter.

At the close of the third quarter, the citywide vacancy rate improved slightly to 14.3 percent compared with 14.5 percent last quarter but increased compared with 13 percent recorded a year ago.

The citywide average quoted triple net rental rate dropped 42 cents from last quarter to reach $17.91 per sf annually, down eight cents compared with the same quarter last year.

Regional malls closed the quarter with a vacancy rate of 10.4 percent. Vacancy among the city’s power centers tightened slightly to 10.1 percent. The vacancy rate for community centers improved to 11.7 percent. Neighborhood centers remained steady over the quarter at 18.7 percent. Activity within area strip centers improved vacancy to 20.3 percent.

Less than 885,000 sf of new retail space has been delivered to the area so far this year, with less than 250,000 sf expected to come online by year’s end. In all, new construction in 2009 will total about one-third of the amount added in 2008.

Also see complete RECON issue for 11/6/2009.