REOC San Antonio
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Kim Gatley
enior Vice President & Director of Research at REOC San Antonio

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REOC San Antonio releases 4Q 2011 medical market update

Source: REOC San Antonio

Fourth quarter activity within the growing Healthcare & Bioscience industry led to new leases and expansions throughout the market.  General office buildings benefitted from two sizeable medical-related expansions including XL Health (11,658 sf) at 4350 Lockhill Selma and Galen Health (11,531 sf) at One Technology Center.  Similarly, the retail market continues to see medical-related activity including Elite Care (11,500 sf) at Countryside Plaza.  Meanwhile, leasing activity within medical-only office properties slowed in the final months of the year.

The San Antonio medical market, consisting of more than six million square feet of separately tracked medical-only, multi-tenant office space, experienced 22,793 square feet of negative net absorption in the fourth quarter.  For the year, however, medical office buildings remained in the black with 33,692 square feet of net gain.  The citywide vacancy rate edged up to 20.0% from 19.6% last quarter and 18.2% recorded at the close of 2010 due primarily to the addition of new inventory.  The citywide average asking rental rate reflected an over-the-year increase of 2.2% to reach $23.09 per square foot per year.  

Speculative construction delivered two on-campus medical office buildings earlier in the year including Westover Hills Medical Plaza II (70,000 sf) located along Hwy 151 adjacent to the Christus Westover Hills Hospital in the Far West sector and the Mission Trail Medical Plaza (80,000 sf) located at Brooks City-Base adjacent to the newly opened Mission Trail Baptist Hospital in the South sector.  The balance of new construction has been user driven including the Westover Medical Park – a three-building, garden office project.  Looking ahead, construction continues on Methodist Healthcare’s 35,500 square-foot building located in the downtown area at 1100 McCullough Avenue.  The three-story building, scheduled for completion in 2012, will come online anchored by Broadway Bank (5,000 sf).  In the Northeast sector, two more garden office professional buildings are under construction at Schertz Parkway Professional Plaza (24,000 sf).

Click to read related article: San Antonio’s medical-office market is stretching beyond the traditional (San Antonio Business Journal, 2-17-12)


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