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 1Q 2013 office market update

 

Source: REOC San Antonio / Xceligent

Source: REOC San Antonio / Xceligent

The San Antonio office market is off to an optimistic start to 2013.  Buoyed by a robust health care industry and an emerging energy sector, leasing velocity appears to be on the rise.  New leases and expansions inked in the first quarter generated 120,762 square feet of positive net absorption led by the Northwest sector.  Specific gains were noted in several Northwest Class A office buildings including the relocation of Dahill Industries (32,271 sf) from an industrial building in the Far West to Fountainhead Tower, Regus Executive Suites (14,873 sf) at éilan 2 and Propel Financial Services (14,165 sf) at The Forum.

Although the CBD submarket remains challenged with a vacancy rate of nearly 30%, positive leasing activity throughout the market allowed the citywide vacancy rate to improve to 19.8%.  Demand for top-tier space tightened the citywide Class A vacancy rate to 12.8%.  More confident with the direction of the market, many landlords are beginning to reign in concessions and test higher rental rates. 

The perceived need for additional quality office space has the market sitting on the cusp of a new development cycle.  In addition to The Oaks at University Business Park 2 (101,630 sf) that is scheduled to come online in the Northwest sector later this summer anchored by Univision (41,000 sf), two new buildings broke ground this quarter in the Far North sector.  Pulte Homes inked a lease for 15,000 square feet to kick off construction at Ridgewood Business Center (65,000 sf) – the first of three value-added office buildings that will ultimately span 256,000 square feet on 6.5 acres in the Ridgewood Park located at Dry Creek Way and Ridgewood Parkway just north of Loop 1604 east of US Hwy. 281.  Shavano Center IV (43,500 sf) is located at 3602 Paesanos Parkway

A steady economy and improving fundamentals have developers in the hunt for pre-leasing activity that will help them kick off newly proposed projects such as WestRidge at La Cantera (128,700 sf), Monterrey Office Park (120,000 sf) and 13582 IH-10 West (104,500 sf).

Click to download the 1Q 2013 Office Market Report and read related article: City’s office market is getting tighter, industry report shows (San Antonio Business Journal, 5-17-13)

 

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