Market Trends
Leasing activity slows but rental rates increase
Demand has slowed slightly for San Antonio office space into 2018. However, the economy continues to do very well. According to the Bureau of Labor Statistics, the unemployment rate in the San Antonio Metropolitan Area dropped over the past year by 0.5% from 3.9% in February 2017 to 3.4% in February 2018. Both the United States and Texas unemployment rates have reduced to now current averages of 3.9%. The San Antonio area’s labor force is now 31,536 jobs greater than it was 12 months ago.
The San Antonio office space market remains in good shape, but as always great office space deals can be hard to find. This 1st Quarter 2018 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 had negative absorption of approximately -72 thousand square feet of office space so far this year. This lack of positive absorption is mostly due to over 600,000 square feet of new office space being delivered within recent months. As the recently constructed spaces get filled up, the outlook for the rest of the year in San Antonio’s office space market looks good. A strong testament to the health of San Antonio’s market is the fact that asking rates have continued to rise steadily over the past several years.
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 most commercial leases. As demand remains high and the city continues to grow, it is expected for rental rates to continue to rise. It is important to plan for future business expansion needs though and not limit your long-term options.
Vacancy and Rental Rates
Rental rates have risen to a now current market-wide average of $23.07/SF. The total vacancy average for the San Antonio office space market is now 15.3%. The vacancy amount increased recently but is expected to be absorbed in the near future. With many new developments planned for Downtown San Antonio, things are looking up for the future of the market.
Additional Information: San Antonio Office Market Report – Q1 2018
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 First Quarter 2018 San Antonio Office Market Report has been obtained from sources deemed reliable. While considered accurate, we make no guarantee, warranty, or representation about it.