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 2013 office market update

Source: REOC San Antonio/Xceligent

Source: REOC San Antonio/Xceligent

The San Antonio office market ended the second quarter with a citywide vacancy rate of 18.6% which is improved compared to 19.8% last quarter and 21.3% recorded in the same quarter of last year.  For the fourth consecutive quarter, the local office market experienced positive net absorption.  New leases and expansions inked in the second quarter generated 239,397 sq. ft. of net gain led by the North Central Class B submarket (97,514 sf) followed closely by the CBD Class A submarket (96,611 sf). 

The North Central sector reported two new leases at Parkway Center – Connection Point (27,989 sf) and Time Warner Cable (20,099 sf) – which backfilled the space previously occupied by Nationwide Insurance prior to moving to its new facility on Highway 151 last year.  The CBD benefitted from the two-floor expansion of HVHC (42,293 sf) at IBC Centre I which tightened the CBD Class A vacancy rate to 9.7% but conditions remain soft in downtown Class B and C properties which recorded vacancy rates of 39.8% and 36.2%, respectively.  

Improving fundamentals have prompted new construction although developers have been reluctant to break ground without significant pre-leasing in place.  Two new office projects are scheduled to be delivered next quarter including The Oaks at University Business Park 2 (101,630 sf) in Northwest sector which will come online anchored by Univision (41,000 sf) and Shavano Center IV (43,500 sf) located in the Far North sector which has pre-leased space to Armadillo Homes (5,800 sf) and Capital Title (3,000 sf).  Also underway is the first of three value-added office buildings slated for the Ridgewood Business Center located at Dry Creek Way and Ridgewood Parkway due to be delivered later this year near the intersection of Loop 1604 & US Hwy. 281; Building 1 (65,000 sf) has pre-leased to Pulte Homes (15,000 sf). 

With the citywide Class A vacancy now standing at 10.6%, several developers have announced plans for speculative projects which would deliver quality office space to the market but which projects move forward and when have yet to be determined.

Click to download REOC San Antonio’s 2Q 2013 Office Market Report

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