Market Trends
Vacancy decreases as absorption remains positive
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 dropped over the past year by 0.9% from 3.8% in October 2016 to 2.9% in October 2017. Both the United States and Texas unemployment rates have reduced to now current averages of 4.1% for the USA as a whole and 3.9% for the State of Texas. Nearly 27,000 new jobs were created in the 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 Year End 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 positive net absorption of nearly 700,000 square feet of office space at the end of 2017. With over 1.2 million square feet of new San Antonio-area office space currently in development and nearly 500,000 SF of office space delivered recently, developers are doing their best to keep up with continuous requests by growing and relocating tenants. The trend of growing rental rates has continued throughout the San Antonio, TX metro area to the dismay of many small business owners. The current asking rates are now $0.72/SF higher on average 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 rise through 2017 as demand remains high for San Antonio office space. The market-wide office space vacancy decreased to 9.0% over the past quarter. Class A office space in the San Antonio area had the highest vacancy of approximately 13.4%. Office space rental rates have increased substantially over the past 12 months to a now current average of $21.08/SF gross for office space throughout the San Antonio market. The now current rates have reduced slightly by $0.06/SF on average within recent months though.
Additional Information: San Antonio Office Market Report – Year End 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 Year End 2017 San Antonio Office Market Report has been obtained from sources deemed reliable. While considered accurate, we make no guarantee, warranty, or representation about it.