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 2Q 2014 Medical Office Market Update

“Current trends in healthcare real estate continue to change the medical office market landscape,” says Carl Bohn, Vice President, REOC San Antonio, a locally-based full-service commercial real estate company.  In recent years, healthcare providers, who aggressively compete for customers, are much more focused on providing convenience and enhancing the patient’s experience.  As such, medical services have spread out from the medical center hubs to suburban locations.

Other trends impacting healthcare real estate include the cost saving efforts of bringing multiple services to a single destination and the development of free-standing emergency and urgent care facilities, largely positioned in retail center settings.  These trends dilute activity that used to be primarily funneled into medical office buildings.  As a result, improvement in the separately-tracked medical-only office market does not accurately reflect the impact of San Antonio’s robust healthcare industry.

The San Antonio medical office market closed the second quarter with a citywide vacancy rate of 17.5% which is up slightly compared to 17.2% last quarter but improved slightly compared to 18.6% recorded in the same quarter last year.  Similar to last quarter, the citywide average quoted rental rate stepped back $0.02 from the preceding quarter and now stands at $23.81 per square foot per year on a full-service basis.  Asking rents remained relatively flat compared to last year at this time showing only a $0.04 increase.  “Rental rate growth is hampered not only by the double-digit vacancy rate but also by the need for medical office building landlords to compete with a wide variety of commercial real estate alternatives,” adds Gatley.

Click to download REOC San Antonio’s 2Q 2014 Medical Office Market Report

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