According to a recent survey by CBRE, the office market in San Antonio has experienced mostly positive growth during the first half of 2024.
The report showed an overall vacancy rate of 18.6%, with an increase in absorption rates. In fact, there was a total absorption of 145,800 square feet during the second quarter alone.
However, despite this positive trend in absorption rates, there has been a slight increase of 50 basis points in total vacancy since the end of 2023. This is mainly due to approximately 175,000 square feet out of newly opened office space remaining unoccupied. Overall though, fundamentals are on an upward trajectory with Class A spaces experiencing the strongest growth.
As demand for office space continues to rise and supply remains limited due to vacancies and new construction projects still underway,the average leasing rate has reached record highs at $29.31 per square foot.This is largely driven by both Class A and B assets contributing towards this growth.
Currently,the San Antonio market offers approximately15 .8 million square feetofClassAspaceand14 .5million
squarefeetofClassBspaceforrent.
Overall,it appears thattheSanAntoniooffice marketisgradually recoveringfromprevious setbacksandis showingpromisinggrowthpotentialintheupcomingyearsasdemandcontinuestoincreaseandsupplyremainslimited.Thisisanencouraging signforinvestorsandbusinesseslookingtoestablishthemselvesinthismarket,anditwillbeinterestingtoseehowthesemarkettrendsdevelopoverthenextfewquarters.
