Deliveries outpacing demand, bumping vacancy up. The San Antonio office market vacancy rate stood at 10.3% moving into the fourth quarter, with year-to-date net absorption at 665,000 sq. ft. and deliveries at 1 million sq. ft. The amount of space under construction during 2017 has remained steady, standing currently at 1.18 million sq. ft., with about half of that space available for lease. The quoted average gross rent has continued to rise at $21.72 per sq. ft. for existing space, while the asking rent for new space has risen to as high as $30.00 per sq. ft.
Microsoft acquires Chevron’s data center. RCA data reports year-to-date office sales volume in the San Antonio area at $545 million, resulting in a year-over-year change of 103%. The buyer composition is made up of 53% private, 23% institutional, 18% user/other, and 5% REIT/listed. A recent transaction in the local market is the acquisition by Microsoft of a 150,000-sq.-ft. office/data center property, Stream Data Center, at 5200 Rogers Road in far west San Antonio, from Chevron Corp. The suburban office telecom building was built in 2009.
San Antonio selected for Ernst & Young Client Service Delivery Center. Ernst & Young plans to spend a minimum of $8.5 million to build a 54,000-sq.-ft. facility at the recently-developed Farinon Business Park in the Northwest submarket. The company, a major financial services firm, currently has 200 workers downtown, and may add up to 600 jobs at its planned location. Incentives from the city, county and state helped San Antonio beat out Atlanta and Jacksonville, Florida for the top spot.
Economy grows at a strong pace in September. The San Antonio economy continued to grow at a robust pace in September, as jobs grew moderately and the area unemployment rate declined to 3.9%, slightly below the state rate of 4.0 and the national rate of 4.2%. Unlike state and national job growth, which declined due to the impacts of the recent hurricanes, San Antonio saw a healthy 3.5% annualized increase in employment.
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