Market Research Report
Comprehensive Analysis & 12-Month Forecast — Q2 2026
Market snapshot
The San Antonio metro industrial market encompasses approximately 140 million square feet — the third-largest industrial market in Texas behind DFW and Houston. San Antonio's industrial demand profile is defined by four structural pillars: the Laredo trade gateway (the #1 U.S.-Mexico land border crossing, 145 miles south on I-35), Toyota manufacturing (one of the largest vehicle assembly plants in North America), Port San Antonio's aerospace and defense ecosystem (14,000+ workers on the former Kelly AFB), and Union Pacific's largest rail classification yard in Texas. Together, these anchors create manufacturing, logistics, and distribution demand that is less cyclical and more geographically captive than any other Texas industrial market — goods flowing across the Texas-Mexico border must move through San Antonio.
Economic context
The San Antonio MSA added approximately 38,000 net new jobs in 2026 — led by healthcare and social services (+12,000), tourism and hospitality, and advanced manufacturing and defense. Critically, San Antonio's economic base is more diversified and less cyclical than either Austin (tech-dependent) or Houston (energy-correlated). The regional unemployment rate at 4.1% is near its post-pandemic low. Manufacturing employment in the SA metro — anchored by Toyota, Port San Antonio's aerospace tenants, and a growing food and beverage processing sector — represents a larger share of total employment than in Austin or DFW, providing a durable structural floor under industrial demand.
Source: Bureau of Labor Statistics, San Antonio Chamber of Commerce. Seasonally adjusted trailing 12-month figures.
Trade corridors & industrial anchors
Unlike Austin's tech-supply-chain industrial or Houston's port-logistics industrial, San Antonio's demand base is a combination of trade gateway, advanced manufacturing, aerospace/defense, and food production — each sector operating on independent demand cycles that collectively flatten the volatility profile of the overall market.
Source: U.S. Bureau of Transportation Statistics, Laredo CBP Port of Entry. 2026 figures are projected based on YTD data and BTS quarterly reports.
Supply & demand
San Antonio delivered approximately 13 million SF of new industrial space in 2023–2024, pushing vacancy from a cycle low of 5.8% to a peak near 9.1%. That supply wave is now definitively correcting. 2026 projected deliveries of approximately 9.5M SF represent a 38% reduction from the 2023 peak, and new starts have slowed sharply as financing costs weigh on speculative development. Net absorption has accelerated to 5.2M SF trailing 12 months — the strongest pace since 2022 — driven by Laredo trade logistics expansion, Toyota supply chain buildout, and continued Port San Antonio leasing activity on the Southside.
Source: CoStar, NAI Partners Q2 2026. 2026 deliveries are projected based on construction pipeline completion schedules.
Capital markets
San Antonio industrial cap rates compressed to a cycle low of approximately 5.4% in mid-2022. Rising interest rates and speculative supply created buyer leverage, expanding cap rates to approximately 7.2% by Q2 2026 — a 180 basis point increase from the trough. At 7.2%, San Antonio offers the highest industrial cap rates of any major Texas market — 120 basis points above Houston (6.0%), 120 above Austin (6.0%), and 120 above DFW (6.0%). For income-focused investors, the current entry point combines above-market yield with the structural demand floor of Laredo trade flows, Toyota production, and Port San Antonio aerospace tenancy — a combination that is not replicated anywhere else in Texas.
Source: CBRE Research, PREA/RCA. Includes properties sold for more than $5M.
Investment sales — trailing 12 months
San Antonio industrial sales totaled approximately $280M per quarter in the trailing 12 months ending Q2 2026. Average price per SF held near $128 — the lowest of the four major Texas industrial markets, reflecting both lower rent levels and higher cap rates. Overleveraged developers from the 2021–2023 speculative construction cycle are surfacing assets at below-replacement-cost pricing in the I-35 North and NE SA corridors. These distressed assets represent genuine value creation opportunities for buyers willing to underwrite 12–24 months of lease-up execution.
Source: PREA/RCA. Includes only properties sold for more than $5M. Excludes development land.
| Property / Submarket | Size (SF) | Price | $/SF | Cap rate |
|---|---|---|---|---|
| Port SA Aerospace Complex, Southside | 580,000 | $80M | $138 | 6.4% |
| I-35 North Distribution Center, Schertz | 640,000 | $78M | $122 | 7.1% |
| Toyota Supplier Industrial Campus, Southside | 340,000 | $48M | $141 | 6.8% |
| US-90 Cross-Dock Facility, West SA | 420,000 | $52M | $124 | 7.3% |
| Loop 410 Logistics Park, NE SA | 510,000 | $62M | $122 | 7.4% |
| Leon Valley Flex Complex, I-10 West | 180,000 | $26M | $144 | 6.9% |
Note: Property names are illustrative examples representative of actual market transaction activity. Cap rates reflect in-place NOI at time of sale.
Submarket analysis
San Antonio's industrial market is organized along four primary transportation spines: I-35 (north-south, connecting Laredo to Austin and beyond), US-90 (the primary Laredo freight corridor), Loop 410 (the inner ring expressway), and I-10 (east-west, connecting SA to Houston and El Paso). The Southside is the manufacturing and aerospace anchor; the west side is the Laredo trade logistics corridor; I-35 North is the growth frontier; and the inner ring (Loop 410) is the established mid-bay logistics submarket.
Schematic representation. Dashed circle = Loop 410. ★ = Port SA / Toyota anchor. Source: CoStar submarket definitions, NAI Partners Q2 2026.
| Submarket | Vacancy | YOY rent chg. | Inventory | Under const. | Outlook |
|---|---|---|---|---|---|
| Southside / Kelly Field / Toyota | 6.9% | +5.8% | 50M SF | 1.8M SF | Strong |
| US-90 West / Laredo Corridor | 7.2% | +4.6% | 20M SF | 0.8M SF | Positive |
| I-10 West / Leon Valley | 7.8% | +3.8% | 14M SF | 0.6M SF | Positive |
| NE San Antonio / Loop 410 | 8.1% | +3.4% | 18M SF | 1.4M SF | Opportunistic |
| Loop 1604 Outer Ring | 8.6% | +3.2% | 12M SF | 1.6M SF | Neutral |
| I-35 North / Schertz-Cibolo | 9.4% | +2.6% | 25M SF | 4.2M SF | Neutral |
Source: CoStar Q2 2026, NAI Partners. Vacancy includes direct and sublease availability. Under construction reflects uncommitted pipeline.
Investment opportunities
Based on vacancy trajectory, rent growth, supply pipeline, anchor demand adjacency, transportation access, and structural demand drivers, the following submarkets offer the most compelling risk-adjusted entry points for San Antonio industrial investors in 2026.
The tightest vacancy in the SA metro and the strongest rent growth — anchored by Port San Antonio (14,000+ aerospace workers) and Toyota's Tundra assembly plant. Demand in this corridor is structural, not cyclical. Port SA's ongoing tenant expansion and Toyota's hybrid production investment will sustain and grow industrial demand here through the decade. Best for stabilized core acquisitions and sale-leaseback targeting aerospace MRO, defense contractors, and Toyota tier-1 suppliers.
The primary logistics corridor connecting Laredo's border crossing to San Antonio's distribution hub. Cross-docking, transloading, cold storage, and customs-bonded warehouse demand is driven by $300B in annual Laredo-Mexico trade — a figure that grows with every nearshoring announcement from a U.S. manufacturer. This corridor's demand is geographically captive: there is no substitute for physical proximity to the I-35 / US-90 Laredo freight spine. Compelling value-add play at current cap rates for mid-bay logistics and cold storage product.
The I-10 West corridor provides direct connectivity to Houston (3 hours), El Paso, and I-35. This is the most established mid-bay logistics submarket in the SA metro — tenanted by regional distributors, construction supply, food manufacturing, and business services industrial. Limited new supply pipeline and steady absorption make this corridor a reliable income story. Best for Class B stabilized acquisitions with below-market in-place rents and near-term rollover to current market.
The NE Loop 410 corridor is the most established mid-bay and bulk logistics submarket in the metro — anchored by Amazon, Sysco, and regional distribution operators. Vacancy is elevated but trending down as the spec pipeline burns off. Distressed assets from 2021–2023 development cycles are surfacing at below-replacement-cost pricing. Investors with appetite for 12–18 months of lease-up risk can acquire stabilized-quality assets at value-add pricing. Best for buyers comfortable with modest concession packages and credit-tenant lease-up targets.
The Loop 1604 outer ring is the long-term industrial growth frontier — residential population is growing rapidly and light industrial demand follows rooftops. Current vacancy of 8.6% reflects early-stage oversupply relative to a demand base that is still forming. The corridor's best prospects are in serving the growing suburban residential and commercial construction sector, food distribution, and last-mile delivery. Patient capital willing to hold 24–36 months will capture the corridor's full demand potential as the residential base matures.
The highest vacancy submarket in the SA metro — driven by speculative 2022–2023 construction without corresponding anchor demand. The long-term case is real: I-35 North connectivity to Austin, Samsung's Taylor fab supply chain spillover, and New Braunfels industrial demand will all benefit this corridor over time. Near-term, avoid unless acquisition price is at a significant discount to replacement cost with 18–24 months of lease-up runway underwritten. Check back in Q4 2026 as the pipeline clears.
Market outlook — 12 to 24 months
San Antonio industrial is at an inflection point defined by two converging forces: a supply correction that is reducing the vacancy headwind from speculative construction, and a structural acceleration in Laredo trade volumes driven by nearshoring. Market-wide vacancy is forecast to return toward 6.5%–7.0% by mid-2027. Rent growth will re-accelerate in the Southside and Laredo corridor as available space tightens. At 7.2% cap rates — the highest in Texas — with a permanent Laredo trade gateway, Toyota manufacturing, and Port San Antonio aerospace anchoring demand, San Antonio industrial is the highest-conviction income play in the Texas industrial market today for yield-focused investors.
| Metric | Q2 2026 (actual) | Year-end 2025 (actual) | Year-end 2026 (forecast) |
|---|---|---|---|
| Market vacancy | 7.8% | ~8.6% | ~6.8% |
| Avg. asking rent / SF | $10.20 | ~$10.50 | ~$10.95 |
| Avg. cap rate | 7.2% | ~6.7% | ~6.5% |
| Annual deliveries | ~12M SF | ~9M SF | ~7M SF |
| Net absorption | 5.2M SF | ~7M SF | ~9M SF |
| Avg. sale price / SF | $128 | ~$134 | ~$142 |
Forecasts based on CoStar, CBRE, NAI Partners, and San Antonio Chamber of Commerce data. Subject to macroeconomic and trade policy risk.