REOC San Antonio
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Kim_Gatley
Kim Gatley
S
enior Vice President & Director of Research at REOC San Antonio

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REOC San Antonio releases 3Q medical market update

Source: REOC San Antonio

The San Antonio medical market closed the third quarter with a citywide vacancy rate of 19.6% which is improved compared to 20.6% last quarter but up slightly compared to 18.4% recorded last year at this time due to newly completed MOBs such as Westover Hills Medical Plaza II (70,000 sf) located along Hwy 151 adjacent to the Christus Westover Hills Hospital in the Far West sector and the Mission Trail Medical Plaza (80,000 sf) located at Brooks City-Base adjacent to the newly opened Mission Trail Baptist Hospital in the South sector. Both buildings are slowly proceeding through lease-up.   

In all, medical office buildings experienced 62,773 square feet of positive net absorption in the third quarter which offset earlier losses and pulled the year-to-date total into the black with 56,485 square feet of net gain. Although the citywide medical market vacancy rate is currently comparable to the 19.9% vacancy rate posted in the general office market, the average quoted rental rate of $23.00 per square foot per year for medical office space runs nearly 10% higher than for general office space. On average, quoted rents are up 1.8% compared to the same quarter a year ago and the average quoted rental rate for Class A medical office space rose to $26.69 – up 1.4% compared to last year.

Construction continues on Methodist Healthcare’s 35,500 square-foot building located in the downtown area at 1100 McCullough Avenue. The three-story building, scheduled for completion in 2012, will come online anchored by Broadway Bank (5,000 sf). In the Northeast sector, two more garden office professional buildings are under construction at Schertz Parkway Professional Plaza (24,000 sf).

Click to read related article Vitality of San Antonio med-office shown in numbers (San Antonio Business Journal, 11-18-11)

Download the REOC San Antonio 3Q Medical Office Market Report.

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