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 2015 Office Market Report

4Q15_SAOfcSnapBLOG

Source REOC San Antonio/Xceligent

The San Antonio Office market closed fourth quarter with 195,139 square feet of positive net absorption leading to a year-end absorption total of 575,859 square feet. The positive quarterly gain was primarily the result of pre-leasing within buildings that reached completion in the fourth quarter such as RidgeWood Plaza (147,000 sf) which came online in the Far North Central sector anchored by EOG Resources. In addition, absorption was bolstered by activity at The Rand Building (115,120 sf) downtown which had previously been owned and occupied by Frost Bank but has recently been repositioned by its current owner, Weston Properites, to a multi-tenant building focused on the high-tech industry. It is currently home to Geekdom, Cloud Academy and Jungle Disc.

Although rumored activity since the close of the fourth quarter is expected to result in significant improvement in the first quarter, the citywide vacancy rate increased slightly to 18.5% at year-end compared to 18.0% last quarter and 18.3% recorded in the same quarter of 2014. Despite this fact, developers remain optimistic that the demand for new, well-located product exists and tenants are expected to continue the flight to quality trend. Citywide vacancy within Class A buildings currently stands at 13.8%, far below Class B and C markets at 20.6% and 24.4%, respectively, but still up 1.4 percentage points from last quarter and 2.9 percentage points compared to the same quarter a year ago.

The citywide average quoted rental rate increased $0.27 from last quarter to reach $20.98 per square foot per year on a full-service basis. Class A buildings in the Far North Central and North Central submarkets demand the highest rental rates citywide, $29.00 and $26.01, respectively, due in part to their desirable locations.

Click to download REOC San Antonio’s complete 4Q 2015 Office Market Report

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