EMPLOYMENT UP IN SAN ANTONIO;
RETAIL MARKET TO SEE VACANCY RISE IN 2010

SAN ANTONIO, March 17, 2010 – While the effects of the recession will continue to impact the San Antonio retail market, some fiscally sound companies are using current conditions to enact expansion plans, according to the 2010 National Retail Report by Marcus & Millichap, the nation’s largest real estate investment services firm. IHOP, H-E-B, LongHorn Steakhouse and Five Guys Burgers & Fries all are set to take advantage of newly available prime locations and strong employment and household growth to open stores throughout the metro this year.

“Local investors are expected to build on the increase in transaction velocity that emerged in late 2009, targeting multi-tenant assets held by out-of-state owners,” says J. Michael Watson, regional manager of Marcus & Millichap’s San Antonio office.

Following are some of the most significant aspects of the San Antonio Retail Research Report:

• With 22,000 jobs expected to be added this year, payrolls will swell by 2.6 percent, one of the healthiest increases in the nation. In 2009, local head counts contracted by 1 percent.
• Metrowide retail inventory is on pace to expand by 650,000 square feet, or 0.8 percent, in 2010, nearly 60 percent of which is located in the Northwest submarket.
• Vacancy is forecast to end this year at 10.6 percent, up 50 basis points from 2009, when vacancy spiked 110 basis points.
• Asking rents are expected to average $14.03 per square foot at the close of 2010, while effective rents will slip to $12.02 per square foot, annual declines of 2.2 percent and 4.5 percent, respectively.

Also included in the report is the firm’s annual National Retail Index (NRI), a snapshot analysis that ranks 44 retail markets based on a series of 12-month forward-looking supply and demand indicators. San Antonio moves down six places this year to No. 17. Washington, D.C., claimed the top spot in this year’s National Retail Index (NRI) for the second year in a row due to a low vacancy rate and healthy job growth. Projected job gains boosted San Diego one place to No. 2 and a lack of significant construction in recent years moved San Francisco up one notch to No. 3. Forecasted job growth elevated New York City four places to No. 4 and continued layoffs dropped New Jersey three places to No. 5, despite low vacancy and the state’s relatively steady economy.

For a copy of Marcus & Millichap’s National Retail Report and the complete NRI rankings, visit www.MarcusMillichap.com.

With more than 1,200 investment professionals in offices nationwide, Marcus & Millichap Real Estate Investment Services is the largest firm specializing in commercial real estate investment services in the nation. Marcus & Millichap closed 3,441 transactions in 2009, the highest of any commercial real estate brokerage firm. Founded in 1971, the firm has perfected a powerful system for marketing properties that combines product specialization, local market expertise, the industry’s most comprehensive research, state-of-the-art technology and relationships with the largest pool of qualified investors nationally.

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