Market Trends
Vacancy rates decrease as office space rental rates rise
Constant demand for San Antonio office space has continued into 2017. According to the Bureau of Labor Statistics, the unemployment rate in the San Antonio Metropolitan Area rose slightly over the past year by 0.2% from 3.7% in January 2016 to 3.9% in January 2017. In comparison to the US and Texas-wide economies, this is still very healthy though. Over 35,000 new jobs were created in the Greater San Antonio area over the past 12 months.
With San Antonio office space being in continuous demand, the ever tightening leasing market makes great office lease deals harder to find. This 1st Quarter San Antonio Office Market Report newsletter is distributed as a means of informing our clients and commercial tenants about ways to save time and money during the office leasing process.
The San Antonio office space market absorbed over 15,361 square feet of office space in the 1st quarter of 2017. This amount appears to be minimal however the market experienced a substantial drop in vacancy over the past quarter. The trend of growing rental rates has continued throughout the San Antonio, TX metro to the dismay of many small business owners. The current asking rates are now over 2% higher than they were at this time last year.
If you are seeking San Antonio office space for lease, it may be in your best interest to sign the longest lease term that you are comfortable with. Market rental rates have been continually rising and in many cases, faster than the annual rent escalations found in some commercial leases. This has been an existing trend for the past several years and it is expected to remain as the city continues to grow. It is important to plan for future growth needs though and not limit your long-term options.
Vacancy and Rental Rates
Rental rates continue to rise in 2017 as growing demand for San Antonio office space endures. The market-wide office space vacancy rate has dropped significantly to 14.8% over the past quarter. This is a substantial change from the 18.3% vacancy rate a year ago. Right now there is nearly 790,000 square feet of new San Antonio area office space in development. As the demand is high, this is not expected to effect the market vacancy or rental rates much. Office space rental rates have increased steadily over the past 12 months to a now current average of $22.68/SF Gross for office space throughout the San Antonio market. This reflects an increase of $0.38/SF from an average $22.30/SF Gross twelve months ago.
Additional Information: San Antonio Office Market Report Q1 2017
If you are interested in rental rates for a certain location or are seeking San Antonio office space for lease, please contact us with your requirement.
Information in this San Antonio Office Market Report Q1 2017 has been obtained from Xceligent, Inc., a source deemed reliable. While considered accurate, we make no guarantee, warranty, or representation about it.