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Construction activity continues at robust pace. The San Antonio office market vacancy rate stands at 9.8% midway through the third quarter, with year-to-date net absorption at 120,000 sq. ft. and deliveries at 108,000 sq. ft. Soaring construction activity continues, with the amount of space under construction at 1.0 million sq. ft., including 673,000 sq. ft. (63.7%) of that space already spoken for. The quoted overall average full-service rent is at $22.24 sq. ft., on par with $22.29 at this time last month.
Investment sales up slightly year-to-date through July. According to Real Capital Analytics, investment sales of office properties in the San Antonio area totaled $366.1 million, up 14.1% from one year ago. Private capital has been the most active buyer type for 2018, comprising 60.0% of San Antonio’s total sales volume, followed by institutional buyers representing the remaining 38.0%. A recent significant transaction, Entrada Partners, purchased One Alamo Center, a 168,500-sq.-ft. office building at 106 S. Saint Marys St. in San Antonio’s Central Business District from Klabzuba Properties.
Economic growth remained mild in June. Job growth inched up in San Antonio at a 0.5% annualized rate in the second quarter. Goods-producing industries continued to grow, although mining and manufacturing slowed from very strong growth earlier in the year. Health care and education, the fastest-growing sector in the second quarter, added over 3,000 jobs, while leisure and hospitality continued to shed positions. San Antonio’s seasonally adjusted unemployment rate stayed at 3.3% in June, well below the 4.0% rate for both Texas and the U.S.
Director of Research
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