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 Releases 4Q 2014 Medical Office Market Report

Source: REOC San Antonio/Xceligent

Source: REOC San Antonio/Xceligent

Regardless of what direction the political winds blow, the healthcare industry continues to expand in San Antonio.  According to the 2014 Healthcare & Bioscience Economic Impact Study, the healthcare and bioscience industry is a dominant powerhouse in the local economy with a conservatively measured annual economic impact of $23.9 billion.  The 2014 report highlights the fact that over the past decade, the healthcare and bioscience industry has added more than 41,500 net new jobs marking a 40% growth rate.  Now, nearly one of every six San Antonio employees works in the healthcare and bioscience industry.

“Job growth typically translates into increased demand for commercial real estate,” says Kim Gatley, Senior Vice President and Director of Research for REOC San Antonio, a locally-based, full-service commercial real estate company, “this serves to support activity not only in medical-only properties but general office buildings and retail centers as well.”

The medical-only market consists of more than 6.7 million square feet of lease space, tracked separately from other commercial properties.  Leasing activity within the medical market was flat in the fourth quarter resulting in 4,533 square feet of negative net absorption.  The accumulated total for the year, however, was positive 149,715 square feet. 

Aside from the lease-up of newly completed buildings, leasing activity remained rather quiet within the medical-only market; meanwhile, activity continued to spill over into other commercial properties.

The medical office market closed the year with a citywide vacancy rate of 18.5% – stable compared to last quarter and up only slightly compared to 18.1% recorded in the same quarter a year ago, despite the addition of nearly 222,000 square feet of new medical office space.  The cost of renting medical office space remained relatively stable as well – climbing only $0.10 compared to the same quarter last year to close the quarter at $23.96 per square foot per year on a full-service basis.  The average quoted rental rate for Class A medical space currently stands at $27.23.

Looking ahead, development will continue to deliver new medical space to the San Antonio market in 2015.

Click to download REOC San Antonio’s complete 4Q 2014 Medical Office Market Report.

 

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