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 3Q 2010 Office Stats

Source: REOC San Antonio

Healthy leasing activity was reported around the city in the third quarter, keeping the San Antonio office market moving along the road to recovery.  

Downtown, Bank of America Plaza signed the Department of Defense (20,616 sf) and suburban activity included BP Exploration (16,400 sf) at McAllister Plaza in the North Central sector, Castle & Cooke Mortgage (11,630 sf) at Terrace at Concord Park in the Far North Central, The GEO Group (13,395 sf) at Northwood Tower in the Northeast, and Wounded Warrior Project (12,154 sf) at Tech Ridge Center II in the Northwest.

According to the research department of local commercial real estate firm REOC San Antonio, gross leasing activity generated 20,584 square feet of positive net absorption for the quarter.  “Although the third quarter performance was rather flat, the market has quietly accumulated 471,508 square feet of positive net absorption for the year, so far, and is expected to see a strong fourth quarter to end the year on a high note,” says Kim Gatley, Senior Vice President and Director of Research for REOC San Antonio. 

Citywide, office properties closed the third quarter with a vacancy rate of 18.6% compared to 18.7% recorded last year at this time.  Likewise, quoted rental rates remained relatively stable.  The citywide average quoted full-service rental rate increased to $20.54 per square foot on a full service basis – up eight cents compared to last quarter and up thirteen cents compared to the same quarter last year for a modest annual increase of 0.6%. 

While vacancy and rental rates remain comparatively flat, there has been surge of office property investment activity 2010.  In addition to the earlier sales of Union Square I & II, Renaissance Plaza and North Park Corporate Center, third quarter transactions included The Titan Building (103,395 sf) and Titan Plaza (28,224 sf) purchased by California-based Thompson National Properties, LLC (TNP) and Northwood Tower (256,841 sf) purchased by Mexico-based Elijoan, Inc.

Demand for space and anticipated growth in the Far West sector have prompted construction of the 100 Sentry Gateway building (95,550 sf) – the only speculative project currently under construction.  Looking ahead, job growth and positive momentum are expected to drive the local office market to recovery despite the addition of more vacancy at Brooks City-Base in 2011.  Further out, the market will be challenged in 2012 when Nationwide Insurance vacates multiple office locations upon completion of its new operations center in Westover Hills.

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