Commercial Real Estate San Angelo Weekly Newsletter
The Big Story
Money got more expensive, and the Fed is signaling it is not done.
The Fed raised its target rate a quarter point on September 16, to 3.75% to 4.00%. It is the first hike since July 2023. The 10-year Treasury moved past 5% for the first time since 2007. In the Fed's own projections, 16 of 18 officials favor another hike before year end. (Commercial Observer, Sept 2026)
Long-term commercial loans price off the 10-year, so this lands on every buyer using debt. One lender survey on October 5 had conventional commercial loans (retail, office, industrial, self storage) at 7.46% to 7.66%, and multifamily over $6 million at 6.40% to 6.44%.
Deals are still getting done. CBRE's midyear review forecasts commercial investment up 16% in 2026, with cap rates holding about flat for the rest of this year and compression picking back up in 2027. With cap rates stuck, CBRE says income matters more for total return.
In San Angelo, asking cap rates on income property listed this year run from 6.00% to 8.71%. At the low end, that is below what a conventional loan costs today.
National
CMBS delinquencies hit 8.02% in September. Trepp had the overall rate up 17 basis points. Multifamily came in at 8.04%, above the overall rate for the first time since the Covid shutdowns. Office was 12.16%, lodging 6.18%, retail 6.58% (down 62 basis points) and industrial 1.14%. Counting loans past maturity that are still paying interest, the overall figure is 9.66%. Trepp via YieldPro (September data, out Oct 4)
Distress is turning into forced sales. Deal professionals quoted by Commercial Observer say lenders are favoring loan sales over extensions, and more deals are cash-in refinances, recapitalizations and lender-controlled sales. One banker said the rate move widens the gap between owners who can add fresh equity and overleveraged owners facing maturities. Commercial Observer
Net lease is the steady corner. CBRE counted $12.8 billion of net lease investment in Q2, up 13% from a year ago and $57 billion over the last 12 months. The average cap rate was 6.9%, flat year over year. Industrial was 6.7%, retail 6.9% and office 7.1%. Industrial and logistics made up 63% of the volume. CBRE (Aug 13)
Industrial vacancy is back under 7%. Cushman & Wakefield had U.S. industrial vacancy at 6.9% in Q2. Leasing hit 193.4 million square feet, the highest since mid-2022, while the construction pipeline sits at 305 million square feet. Cushman & Wakefield (July 23)
Retail stays tight. National retail vacancy was 6.0% in Q2, with asking rents at $25.65 a square foot, up 2.2% from a year ago. New construction is under 0.3% of existing space. Demand is concentrated in grocery, discount and health and wellness. Cushman & Wakefield (Q2)
Office is better, but still the weak spot. Vacancy was 20.1% in Q2, down 10 basis points from a year ago, and fell in 49 of 92 markets. Leasing demand over the last four quarters is the highest in six years. At the same time, office loans in CMBS are 12.16% delinquent. Both are true. Cushman & Wakefield (July 17)
Texas
Apartment construction is falling fast. The Texas Real Estate Research Center at Texas A&M expects apartment deliveries to drop from 93,000 units over the past year to about 40,000 by summer 2027. Average statewide rent is $1,372 a month. It also sees Texas GDP growth of 2.4% to 2.8%, ahead of its 2% to 2.5% U.S. view. TRERC via CRE Daily (Sept 10)
Buyers are getting ahead of a rent recovery. Hudson Multifamily Group's midyear briefing had trailing-year sales volume up 42% in Dallas-Fort Worth and 32% in Houston. The most active product is 50 to 300 units built between 1980 and 2018. Hudson via CRE Daily (Aug 1)
Industrial in DFW is absorbing more than it builds. Lee & Associates had Q2 vacancy at 8.7%, net absorption of 17.1 million square feet against 11.1 million delivered, asking rent of $9.33 a square foot and a 6.21% average cap rate. About 37.8 million square feet is still under construction. Lee & Associates (Q2)
Statewide, new supply is cooling outside industrial. TRERC expects more than 50 million square feet of industrial deliveries over the next 12 months, under 5 million of new office, and about 1% retail inventory growth with 2% to 3% rent growth. TRERC via CRE Daily
West Texas oil is running hot. The EIA's September outlook has the Permian at 6.8 million barrels a day this year, up 3%, inside a record 13.8 million for the U.S. West Texas Intermediate averaged $84 a barrel through August, against regional breakevens of $63 to $69. Worth watching if you own or want industrial, hotel or multifamily in West Texas. EIA via AJOT (Sept 2026)
San Angelo
Local MLS commercial snapshot, September 2026
| Measure | September | August |
|---|---|---|
| Active commercial listings | 83 | 75 |
| New listings | 13 | 14 |
| Pended | 2 | 1 |
| Sold | 1 | 2 |
| Median active list price | $425,000 | $425,000 |
| Total active list volume | $47.1 million | $41.4 million |
Over the last 12 months (October 2025 to September 2026) the Local MLS shows 28 commercial closings and about $7.9 million in reported sale volume. A year ago, in October 2025, active listings were 73.
At that pace of about 2.3 sales a month, 83 active listings is roughly three years of supply. Closed sales are few, so one deal can move any monthly average. Average days on market was 164 for September, from a single sale.
What it means for investors: this is a thin, slow-moving market. Buyers have plenty to look at and room to negotiate. Sellers priced above what the local market has been paying should expect long hold times.
New and notable on LoopNet
314 E Harris Ave, 24-unit apartment building. $1,200,460 asking, 7.39% stated cap rate. That works out to about $50,000 a unit. On the market since September 29. Listing broker: Brandon Sanders, Steve Eustis Co. Realtors.
318 N Chadbourne St, 5,383 SF retail building. $559,988 asking, 8.14% stated cap rate, about $104 a square foot. On the market since September 23. Listing broker: Sterling Fryar, Keller Williams.
2701 S Johnson St, data center and office. Six stories, about 286,000 SF, with 6 MW of power now and approval for up to 50 MW. It is in an online auction that ends October 7 at noon. As of October 5 the reserve had not been met. Listed August 24. Listing brokers: Ernesto Cammarano and Maria Rocha, eXp Commercial. SanAngeloLIVE
Cap rate watch: income property listed in 2026
| Property | Size | Asking | Stated cap | On market | Listing broker |
|---|---|---|---|---|---|
| Dollar General, 1821 Country Club Rd | 9,026 SF | $2,500,000 | 6.00% | May 1 | Elizabeth Randall, Randall Commercial Group |
| 949 Gateway Dr (industrial) | 47,701 SF | $5,700,000 | 6.90% | Feb 18 | Troup Rolland and Carson Deer, Capital Real Estate Commercial |
| Sherwood Oaks Shopping Center | 23,600 SF | $4,995,000 | 8.55% | Mar 10 | Tony Anderson and Richard Brehaut, CBRE |
| 113 E Twohig Ave (retail) | 3,000 SF | $480,000 | 8.71% | Jan 26 | Sterling Fryar, Keller Williams |
For comparison, CBRE has the national net lease average at 6.9%, and Lee & Associates has DFW industrial at 6.21%. The smaller local retail asks for more yield than the national average. The Dollar General is the exception at 6.00%. Cap rates are as stated in the listings and have not been verified.
Financing snapshot
Indicative rates from one commercial lender survey, October 5, 2026. Actual quotes depend on the deal.
| Loan type | Rate |
|---|---|
| Multifamily, over $6M (5 to 10 year) | 6.40% to 6.44% |
| Apartment, under $6M (5 to 10 year) | 6.64% to 6.75% |
| Conventional commercial (5 to 10 year) | 7.46% to 7.66% |
| CMBS, 10 year | 7.26% to 7.90% |
| SBA 504 | 6.95% |
| SBA 7(a) | 7.00% |
| Bridge | 9.00% |
Source: Select Commercial
By the Numbers
- Fed funds target: 3.75% to 4.00% (national, Sept 16)
- 10-year Treasury: above 5% (national, Sept)
- CMBS delinquency: 8.02% overall, 8.04% multifamily, 12.16% office (national, Sept)
- Net lease average cap rate: 6.9% (national, Q2)
- Industrial vacancy: 6.9% (national, Q2)
- Retail vacancy: 6.0% (national, Q2)
- Office vacancy: 20.1% (national, Q2)
- Texas apartment deliveries: 93,000 to about 40,000 by summer 2027 (state forecast)
- DFW industrial cap rate: 6.21% (Q2)
- San Angelo active commercial listings: 83 (Local MLS, Sept)
- San Angelo commercial closings: 28 over 12 months (Local MLS, through Sept)
- San Angelo asking cap rates on listed income property: 6.00% to 8.71% (LoopNet, 2026 listings)
The Takeaway
Debt costs more than it did this summer, and the Fed is pointing to more. That puts the focus on income. A deal where the rent comfortably covers the loan holds up. A deal that needs rates to fall does not.
Nationally, distress is building in multifamily and office loans, and the people closest to it expect more recapitalizations and lender sales. In Texas, apartment construction is falling off and industrial leasing is outrunning new deliveries.
In San Angelo, the market is slow and deep. There is a lot to choose from, few sales, and a few income properties priced with real yield. If you are looking at a deal in San Angelo or the Concho Valley, that is a market where being patient and careful with the numbers pays.
None of this is a forecast. It is where the numbers sit today. This report is general information, not investment, legal or tax advice.
Local data: San Angelo Association of REALTORS MLS via Flexmls, commercial property type, City = San Angelo. Small sample sizes. Listing data from LoopNet, with stated cap rates not verified. Information believed reliable but not guaranteed.
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