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 2010 Medical market update

Source: REOC San Antonio

Reflecting both the challenging economy and the uncertainty regarding health care reform, leasing activity within San Antonio’s 5.8 million square feet of multi-tenant medical office space slowed in the second quarter. 

In all, the market experienced a very flat 292 square feet of negative absorption for the quarter but a strong first quarter performance kept the year-to-date total in positive territory with 53,507 square feet.  New supply worked to raise the citywide vacancy rate to 19.3% compared to 18.5% in the same quarter last year. At the same time, the average quoted full-service rental rate climbed fifty-five cents compared to a year ago to reach $22.31 per square foot per year.

Topping news in the second quarter, it was announced that California entrepreneur Mir Imran, creator of the life sciences incubator concept called InCube Labs located in the Silicon Valley, has targeted San Antonio for a multimillion dollar investment which would further strengthen the local industry and infuse the market with new growth potential. 

In other news, Partners Health Trust purchased Westover Hills Medical Plaza I (60,549 sf) – a three-story medical office building constructed for the adjacent 150-bed CHRISTUS Santa Rosa Hospital located along Highway 151 in the emerging Far West sector.  Trammell Crow is currently developing Westover Hills Medical Plaza II (60,500 sf).

The nucleus of San Antonio’s Healthcare and Bioscience industry, which boasts an annual economic impact of approximately $16.3 billion and accounts for more than 116,000 jobs, is the South Texas Medical Center (STMC) situated in the Northwest sector.  According to the latest progress report for facilities in the STMC released by the San Antonio Medical Foundation, combined budgets totaled $3.332 Billion and capital projects currently in progress and projected over the next five years total approximately $1.478 Billion.

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