Market Deep Dive - San Antonio

San Antonio is one of the most critical IOS markets in the sunbelt. Here’s why.

SAN ANTONIO - IOS MARKET DEEP DIVE

Market Snapshot:
San Antonio remains one of the country’s fastest-growing metros, welcoming nearly 24,000 new residents last year. Industrial vacancy hovers just below 9%, underpinned by ongoing expansion in construction, logistics, and manufacturing.

IOS Trends:
Between late 2023 and 2025, industrial outdoor storage (IOS) leases have averaged about $4,700 per acre per month, marking a 10% annual increase. The median land sale price sits near $750,000 per acre.

Key Fundamentals:
Industrial land continues to trade well below Austin’s pricing, and improvements along Loop 1604 and I-10 are boosting connectivity. I-1 and I-2 zoning offer flexibility and relatively efficient permitting compared to other Texas metros.

IOS Market Pulse:
Activity remains strongest along the I-35 corridor, especially in Northeast and Northwest San Antonio, where infrastructure investment and proximity to Mexican trade routes are fueling growth. You’ll find highlighted properties and listings at the end of this email.

Market Contacts:
Scroll to the bottom for a directory of local IOS brokers and tenant reps actively shaping the San Antonio market.

MARKET OVERVIEW

The Alamo City Keeps Climbing

San Antonio’s growth trajectory hasn’t slowed. From July 2023 to July 2024, the metro added roughly 24,000 new residents, ranking fourth nationally in population gains. Now home to 1.53 million people within city limits and 2.8 million metro-wide, San Antonio is projected to overtake Philadelphia within a few years.

This growth reflects strategy, not chance: more than half of the metro’s newcomers since 2020 have relocated from out of state, attracted by affordability and job opportunities. The region’s $190-billion economy has grown by nearly 60% over the last decade, yet remains 8–9% below the national average in cost of living.

Major employers such as Joint Base San Antonio, H-E-B, USAA, and a growing tech ecosystem provide a stable foundation. Unemployment sits around 3.7%, lower than state and national benchmarks. Strong job creation across manufacturing, logistics, and construction is directly fueling IOS demand.

San Antonio’s position on Interstate 35 is a crucial advantage. The nearshoring wave from Mexico continues to boost industrial inventory, now totaling 88.9 million square feet with rents averaging $7.53/SF annually. The Union Pacific network connects the metro seamlessly to U.S., Canadian, and Mexican markets—without the congestion seen in larger port cities. As of Q4 2024, overall industrial vacancy remains just under 9%.

IOS OVERVIEW

Why IOS Matters in San Antonio

IOS properties fill a gap traditional warehouses cannot—serving as bases for equipment storage, vehicle fleets, and material staging.

From Q4 2023 through 2025, IOS leases in the area have averaged $4,700 per acre per month, with a median sale price of $750,000 per acre. Rates have climbed roughly 10% year-over-year, a clear reflection of sustained tenant demand.

Most leases involve 3-acre single-tenant sites, often occupied by construction, logistics, or energy-related users. About 25% of deals involve national or blue-chip tenants, while the remainder serve strong regional operators.

Hot Spots:

• Northeast / I-35 Corridor: The most active submarket for both leasing and sales.

• Northwest / Loop 1604: Emerging as interchange upgrades improve access.

• South / I-35 South: Offers more affordable land options with strong trade route connectivity.

Demand sources mirror the region’s economy: contractors need staging yards, logistics firms require trailer parking, military contractors store vehicles, and energy and food-distribution companies need secured, paved sites. Premium IOS assets with concrete or asphalt paving, perimeter fencing, 24-hour access, and utilities command higher rents and attract credit-worthy occupiers.

MARKET DRIVERS

Land Costs & Opportunity Zones
Industrial parcels remain far cheaper than Austin’s, and Opportunity Zones provide long-term tax incentives for developers and investors.

Infrastructure & Access
Billions of dollars in road improvements—especially along Loop 1604 and I-10—are strengthening regional logistics routes.

Zoning & Permitting
I-1 and I-2 districts provide flexibility for IOS operations, with generally smoother permitting and lower taxes than competing metros.

Comparative Edge
Austin’s prices have pushed users south, Dallas carries higher operating expenses, and Houston faces insurance and port constraints. San Antonio delivers accessibility and cost efficiency without the same premium.

Labor Pool
A 2.8-million-person metro and a median age of 34.6 create a deep labor pipeline. Institutions like UTSA, Trinity, and St. Mary’s feed skilled graduates into the industrial economy.

LOCAL EXPERTS

Partners Real Estate
Newmark – Reid Halverson (972-715-4371 | [email protected])
Cavender & Hill – Lee Jordan, SIOR (210-507-2710 | [email protected])