Despite lingering macro-economic headwinds, the retail landscape in San Antonio is healthy and strong, shaped by evolving consumer behaviors, shifts in commercial real estate trends, and the region’s unique dynamics.

Grocery-anchored centers have long been a cornerstone of retail properties, and they continue to hold immense value. These centers are particularly attractive due to their recession-resistant nature, making them a staple for both developers and retailers. They draw a wide range of tenants, thanks to the consumer demand for grocery stores. However, in San Antonio, the landscape presents unique challenges due to the dominance of H-E-B, a local grocery chain that owns much of its real estate and surrounding land. While this reduces available investment opportunities, it also drives high tenant demand in underserved areas, presenting both obstacles and opportunities.

Power centers, once thought to be on the decline with the rise of e-commerce, have experienced a resurgence. The pandemic and the boom of online shopping initially led to uncertainty about the viability of these retail spaces. However, as soft goods retailers return to brick-and-mortar locations, power centers are finding new life, not only as retail storefronts, but also to serve the rising need for local warehousing and distribution from increasing online customer sales. Fitness centers and service-oriented businesses are now filling spaces once occupied by traditional retailers. Property owners and co-tenants appear to be relaxing their restrictions on those uses in order to welcome them to the centers and capitalize on the changes in the market.

The far west and east sides of San Antonio are areas poised for significant growth. As new developments spring up in these rapidly expanding regions, retail establishments are eager to tap into shifting demographics. Understanding where major retailers, like H-E-B and Wal-Mart, plan to expand provides valuable insight into the future of retail in these fast-growing neighborhoods.

While challenges such as consumer parking expectations and rising property taxes and insurance premiums persist, the outlook for San Antonio’s retail sector remains positive. Despite high construction costs and limited new space, retail vacancies remain low, and demand for existing properties remains strong.