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

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REOC San Antonio releases 1Q 2013 medical office update

Source: REOC San Antonio

Source: REOC San Antonio

For the consumer, the number one health care reform issue is the “individual mandate” – the law that requires individuals to have health insurance starting Jan. 1, 2014 or face a tax punishment.  For the medical office market, the implementation of the Affordable Care Act and the effects of this vast expansion of Medicaid are not quite as clear but the utilization of health services is expected to increase the demand for medical office space. 

To date, the San Antonio medical office market has not been significantly impacted by recent legislation.  Instead, the local market continues to demonstrate strength and stability based on traditional factors – an expanding economy and population.  

Area medical office buildings experienced 141,532 square feet of positive net absorption in the first quarter led by activity in the Far North sector. Noteworthy gains were reported in the 18707 Hardy Oak Medical Pavilion including the opening of the Institute for Women’s Health (15,000 sf).  The citywide vacancy rate improved to 17.0% – down from 17.9% last quarter and 19.7% compared to the same quarter the previous year.  The steady improvement in occupancy continues to support modest rental rate increases.

New construction delivered two 36,000 square-foot medical office facilities in the first quarter with a third completed in April.  Developed by Emerus, all three two-story buildings are anchored by Baptist Emergency Hospital with additional lease space available on the second floor.  Victory Medical Center (95,000 sf), located at IH-10 & Loop 1604 in the Northwest sector, will come online in the second quarter and a new 45,000 square-foot MOB is expected to break ground in May in the emerging Far West sector where CHRISTUS Santa Rosa recently broke ground on Westover Hills Medical Plaza III (70,000 sf) situated on the hospital campus located along Hwy. 151.

Click to download the 1Q 2013 Medical Office Market Report.


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