Regional Review: San Antonio’s industrial real estate growth accelerates along I-35 corridor

Writer: Mariana Hernandez

Regional Review is a year-end series from caa that looks at key developments in a focused industry throughout the year and sets the stage for what’s to come in the near term.

December 2025 — San Antonio’s economic momentum is increasingly reflected in the pace and scale of its industrial real estate development.

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In 2025, the city and its surrounding communities saw a surge in logistics, manufacturing and infrastructure investment, particularly along the I-35 corridor. Rather than isolated projects, these developments represent a broader chain reaction linking population growth, cross-border trade and the restructuring of supply chains amid technological expansion.

As the region looks ahead to 2026, industrial real estate has emerged as one of the clearest indicators of where capital, labor and long-term confidence are flowing in the Alamo City.

The I-35 corridor expansion

The I-35 corridor north of San Antonio has become a focal point for large-scale industrial and commercial investment, driven by its strategic location, strong population growth and proximity to key logistics routes. 

Submarkets including Cibolo, Schertz and New Braunfels are attracting hundreds of millions of dollars in new development, often supported by local incentives.

Among the most significant projects in the corridor, Project Theo stands out. The $450 million next-generation robotic distribution center is planned for the former San Antonio Raceway site in Cibolo. Backed by a Fortune 500 company, the facility will feature automated racking systems reaching up to 120 feet and is expected to generate more than 425 full-time jobs with wages above the regional median. The project demonstrates the corridor’s growing appeal to technologically advanced logistics operators.

Manufacturing investment is also taking shape across the region. Lefko USA, a Canadian advanced plastics manufacturer, is establishing its first U.S. headquarters and production facility in New Braunfels, bringing more than $15 million in capital investment. The project is expected to create more than 150 jobs and support industries ranging from renewable energy to health care and trucking, further diversifying the industrial base along I-35.

Supporting development is also under way. Projects such as the Schertz Station mixed-use retail destination, the Faust Hotel renovation and the Northeast Lakeview College expansion are helping expand the infrastructure needed to support workforce growth and long-term economic sustainability.

The rise of logistics supersites

Industrial demand along I-35 is evident not only in new development, but also in transactions. In late 2025, Koontz Corp. sold the first parcel within its 188-acre Frontera Logistics Supersite to Builders FirstSource, a Fortune 500 building materials supplier.

The acquisition marks the first step in the development of a fully entitled logistics campus designed to attract large-scale manufacturers and suppliers. Builders FirstSource plans to construct a 93,000-square-foot manufacturing warehouse, with construction expected to begin in early 2026. According to Koontz Corp.’s leadership, the initial sale is already accelerating interest from additional users, reinforcing the site’s role as a strategic industrial node.

Proximity to Mexico and streamlined supply-chain access remain key advantages, particularly as companies seek to mitigate tariff exposure and pursue reshoring strategies.

Cross-border trade and regional momentum

Beyond the San Antonio metro, industrial investment across South Texas is reinforcing the region’s importance within national and international supply chains. In Mission, Texas, Killam Development recently opened the 175-acre Sharyland Business Park, a project capable of accommodating up to 2.5 million square feet of industrial space.

Located near the Anzalduas International Bridge — which recently underwent an $88 million expansion — the park is positioned as a critical hub for warehousing, cold storage and manufacturing tied to U.S.-Mexico trade flows. Despite ongoing uncertainty surrounding trade policy and the future of the U.S.-Mexico-Canada Agreement, developers continue to commit capital across the Rio Grande Valley, signaling long-term confidence in cross-border logistics demand.

For San Antonio, these developments reinforce its role as a connective point between border production markets and inland distribution networks.

Data centers and digital infrastructure

While logistics and manufacturing remain central to San Antonio’s industrial growth, 2025 also highlighted a shift toward higher-tech industrial uses. Microsoft announced plans to build another data center in Medina County, adding to a growing cluster of digital infrastructure projects along the western edges of Bexar County.

The proposed 195,670-square-foot facility, with an estimated investment of $400 million, is part of Microsoft’s broader strategy to expand its cloud services footprint in the region. Additional filings point to future campuses totaling hundreds of thousands of square feet, with delivery timelines extending into 2028.

The presence of major operators such as Microsoft, Vantage Data Centers and CyrusOne reflects San Antonio’s increasing appeal for data-driven industrial development, supported by available land, energy infrastructure and long-term planning capacity.

Looking ahead

Together, these projects paint a clear picture of San Antonio’s industrial trajectory. The convergence of logistics infrastructure, advanced manufacturing, cross-border trade and digital expansion positions the region for continued industrial real estate growth in 2026.

While broader economic uncertainty, interest rates and trade policy remain fluid, the scale and diversity of investment along the I-35 corridor suggest that industrial real estate will remain a cornerstone of San Antonio’s growth strategy. For developers, investors and residents alike, the region’s industrial landscape continues to evolve — creating new opportunities for long-term economic expansion.

Want more? Read the Invest: San Antonio report.