Kendall County Commercial Real Estate Report 3-31-18

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CoStar Q1 2018 Retail Report

Kendall County Retail is very interesting right now. Although there is plenty of activity, much of what is scheduled in/around Boerne, Texas will be coming to market at almost the exact same time. Unless something changes a bit, we may experiencing too much retail space on the market. Also of concern is that fact that we’ve encountered our first Triple Net Rates (NNN) in excess of $8 in Boerne, Texas. Both projects quoting this rate are around $8.50+/- NNN Rates. In addition, both projects are quoting $30+/- PSF for Base Rent. Can a local market like Boerne and Kendall County sustain $38.50 rates? Time will tell. The really good news on the Retail front is that the Village at 32 Herff may be completely leased. Congrats to the owner of that property!

CoStar Q1 2018 Office Report

The Kendall County Office report appears to be fairly accurate. We had somewhat of a shortage when vacancy rates dropped to about 4%. So, many projects started including office and medical office. Certainly 10% vacancy isn’t “too much” office on the market, but potential tenants now have options. The past 4-5 months have revealed that most of the potential tenants looking in the market are seeking “move-in” ready projects – For Example 138 Old San Antonio Rd. (Seven Oaks) will have “move-in” ready product by mid-late May. The office market continues to grow as Kendall County’s population continues to grow.

CoStar Q1 2018 Industrial Report

The word that comes to mind in the Kendall County Industrial market is “shortage.” Most of those seeing space in the market are getting creative with unrestricted residential properties, especially if there is a barn. There are new projects on the horizon like 110 Old San Antonio Rd., Boerne, TX 78006. But, for now, it’s a tight market. Two comments about rental rates in this report. 1-True industrial/flex rates in the “average” SF range (1000-3000) are at or above $1 PSF ($12 PSF annually). Most of these deals aren’t reported accurately in CoStar. 2-In Kendall County, most anything that is $0.50 PSF ($6 PSF annually) isn’t property we hear the average business owner seeking.

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Kendall County Commercial Real Estate Report 3-31-18