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Dec 08, 2023

UPS to open $33 million small

UPS plans to open a facility in Schertz next year. UPS is

UPS plans to open a facility in Schertz next year.

UPS is planning to open a 176,000-square-foot facility in Schertz to help the company serve customers in fast-growing cities such as Cibolo and New Braunfels.

The Atlanta-based shipping company is leasing space at Enterprise Industrial Park along the booming Interstate 35 corridor for the small-package operation.

The $33 million automated facility at 17745 Lookout Road will handle 7,500 packages per hour and is expected to open in mid-2024, a spokesperson said. It will be between existing UPS hubs in Northeast San Antonio and San Marcos, the spokesperson said.

Word of the expansion comes as demand for industrial space in the San Antonio-New Braunfels metropolitan area continues to outgrow construction, according to Partners, a commercial real estate firm that represented landlord Baltisse-Ackerman Schertz LLP in the UPS lease.

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Tenants took more than 1.3 million square feet in the fourth quarter, outpacing about 1.2 million square feet of new space completed during the three-month period. It was the ninth consecutive quarter that demand has exceeded supply, Partners said.

The vacancy rate for the industrial market was 3.5 percent, down from 5.2 percent in the fourth quarter of 2021.

Some of the largest leases in 2022 included Tesla taking 439,809 square feet and Dollar General taking 267,840 square feet at industrial parks on the far East Side.

About 8.8 million square feet was built last year, 8 million square feet is under construction and 5.5 million square feet is proposed through 2023.

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"The need for more industrial development in the area appears apparent," Partners said in its report.

UPS’ San Antonio expansion is coming in spite of the company's expectation that global delivery activity is cooling this year.

In a quarterly earnings call with analysts, Chief Financial Officer Brian Newman said the company expects "a bumpy year" because of high inflation and interest rates, a potential recession, Russia's war in Ukraine, pandemic snags in China and domestic labor negotiations with the Teamsters union.

UPS forecasts revenue between $97 billion and $99.4 billion, down from $100.3 billion in 2022.

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