REOC San Antonio
Commercial Real Estate Since 1974   
Kim_Gatley
Kim Gatley
S
enior Vice President & Director of Research at REOC San Antonio

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REOC San Antonio releases 1Q 2011 office report

Source: REOC San Antonio

The San Antonio office market is stable and improving.  The citywide vacancy rate remained relatively stable at 18.8% compared to 18.5% recorded last year at this time while the average quoted rental rate saw a modest annual increase of 1.1% to reach $20.67 per square foot per year on a full-service basis. Healthy leasing activity occurred throughout the market but company moves and downsizings, especially in the Northwest sector, counteracted the positive impact of leases signed in the first quarter. 

Overall, local office properties experienced 26,569 square feet of positive net absorption in the first quarter.  Class A properties accounted for all the positive gain this quarter and recorded 97,653 square feet of positive net absorption while older Class B buildings experienced the brunt of negative absorption with 68,980 square feet of loss. 

Speculative development of general office projects remains limited.  Nearing completion is the three-story building located at 17115 San Pedro (42,377 sf) to be anchored by Killam Oil Co. (6,862 sf) and work has begun on The Bakery on Broadway (107,644 sf) – the redevelopment of the Butterkrust Bakery which will be anchored by CH Guenther (54,144 sf).  Build-to-suit development includes a new 100,000 square-foot facility for Kinetic Concepts Inc. located at IH-10 and University Heights Blvd.  Upon completion expected mid-2012, KCI will relocate the corporate headquarters out of KCI Tower leaving behind approximately 100,000 square feet.  Likewise, Nationwide Insurance has closed on the purchase of land in Westover Hills and plans to build a new facility spanning up to 300,000 square feet.  Upon completion expected late-2012, Nationwide will pull out of 93,000 square feet at 4300 Centerview and roughly 46,000 square feet at the Farinon Building along with space occupied at Parkway Center in the North Central sector.   

Investment activity in the first quarter included the purchase of Overlook at the Rim (145,025 sf) by Cole of San Antonio TX, One International Center (300,241 sf) by Rosemont and Westover Office Center (102,000 sf) by sole tenant Kohl’s.

Read more at San Antonio’s office market is slowing gaining traction, report shows (San Antonio Business Journal, 4-15-11) and Vacancy rates see uptick (San Antonio Express-News, 4-27-11).

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