San Antonio Office Report – Summer 2019

Office asking prices averaged approximately $25 per square foot, $11 below the national level and $17 less than nearby Austin’s average price.
Office-using employment in San Antonio, click to enlarge
Office-using employment in San Antonio, click to enlarge

Boasting solid employment gains, rapid population growth and a favorable regulatory climate for businesses, San Antonio continues to attract interest in its office sector. Investment through August increased by more than 25 percent compared to the previous year’s total, while investors shifted away from value-add plays in the market. More than 80 percent of the $237.5 million in confirmed transactions targeted Class A properties.

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Office asking prices averaged approximately $25 per square foot, $11 below the national level and $17 less than nearby Austin’s average price. The CBD was one of the most affordable submarkets for leasing, even as a multimillion-dollar revitalization moves forward in the city center. The University of Texas at San Antonio also continued work on its downtown campus expansion, with a particular emphasis on tech education, expected to triple enrollment.

Employment growth by sector in San Antonio, click to enlarge
Employment growth by sector in San Antonio, click to enlarge

Meanwhile, developers have also focused heavily on the urban core, with more than 65 percent of San Antonio’s 1.2 million square feet of office projects located in the CBD. By the end of the year, nearly 785,000 square feet are expected to deliver in the metro, 75 percent in the city center. While the market’s vacancy was 13.9 percent in August, the number of upcoming office deliveries is expected to lead to an uptick, primarily in Class B properties.

Read the full Yardi Matrix report.