Market Trends
Rental rates rise with increased tenant demand
Consistent demand for San Antonio office space has continued through 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 3.4% in April 2016 to 3.6% in April 2017. The United States currently has an unemployment average of 4.3% and The State of Texas is at 4.8%. Over 25,000 new jobs were created in the Greater San Antonio area over the past 12 months.
With San Antonio office space becoming more desirable, the tightening commercial leasing market makes great office space deals hard to find. This 2nd 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 200,000 square feet of office space in the 2nd quarter of 2017. With over 800,000 square feet of new San Antonio-area office space currently in development and over 410,000 SF of office space delivered so far this year, developers are doing their best to keep up with increasing requests by growing and relocating tenants. The trend of rising 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 5% 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 most commercial leases. This has been an existing trend for the past several years and it is expected to remain as growth continues. It is important to plan for future business expansion needs though and not limit your long-term options.
Vacancy and Rental Rates
Rental rates continue to increase in 2017 as demand remains high for San Antonio office space. The market-wide office space vacancy rate has risen slightly to 15.2% over the past quarter. This is a substantial change decrease from the 18.5% vacancy rate a year ago. Office space rental rates have increased steadily over the past 12 months to a now current average of $23.46/SF gross for office space throughout the San Antonio market. This reflects an increase of $1.19/SF from an average $22.27/SF gross twelve months ago.
Additional Information: San Antonio Office Market Report Q2 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 Q2 2017 has been obtained from Xceligent, Inc., a source deemed reliable. While considered accurate, we make no guarantee, warranty, or representation about it.