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 Releases 4Q 2016 Office Market Report

Source: REOC San Antonio/Xceligent

Source: REOC San Antonio/Xceligent

Following an exciting third quarter in the San Antonio office leasing market, the fourth quarter finished strong with expansions and new leases. USAA will move into all 157,400 square feet of the newly completed Vista Corporate Center by the fall of 2017 after a reported $26 million build out.

During the fourth quarter, San Antonio managed to add 359,210 square feet of positive net absorption which raised the year-end total to more than $1.3 million square feet. The 2016 total is a major milestone in historical absorption, topping the performance of 2006 (1.1 msf) but not quite reaching the record performance of 2000 (1.9 msf).
The fourth quarter citywide vacancy rate tightened to 15.1%, half of a percentage point drop from last quarter’s 15.6% citywide rate and 3.4 points lower than the same quarter in the previous year. Two new projects were completed during the fourth quarter, the much anticipated Vista Corporate and the Hardy Oak.

The vacancy rate for Class A office buildings remained at 11.6% compared to the previous quarter and still a 2.2 point compared to twelve months ago. While Class A space kept a steady pace in terms of vacancy, Class B and C vacancy rates each experienced a healthy drop from the previous quarter at 16.4% and 20.6%.

Strong vacancy rates translate to rising rental rates which can be observed across all office building classes, which brings the citywide average for office properties to $23.82 per square foot on annual, full-service basis. When looking back to the fourth quarter of the previous year, there was an increase of $.33 for the citywide rate, while a $0.05 drop from the previous quarter.

 

Click the following link to download REOC San Antonio’s complete report: 4Q 2016 Office Market Report

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