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As of the end of the fourth quarter of 2019, the vacancy rate for Class A and Class B office/medical properties was up 80 basis points quarter-over-quarter to 17.0%, and an increase of 150 basis points year-over-year. As a point of comparison, the San Antonio area’s overall office vacancy rate for Class A space registered at 11.5% as of Q4 2019.


Vacancy edges up

As of the end of the fourth quarter of 2019, the vacancy rate for Class A and Class B office/medical properties was up 80 basis points quarter-over-quarter to 17.0%, and an increase of 150 basis points year-over-year. As a point of comparison, the San Antonio area’s overall office vacancy rate for Class A space registered at 11.5% as of Q4 2019, and Class B a tighter 9.8%. Net absorption remained in the red at negative 20,000 sq. ft., with Class A space representing positive 16,000 sq. ft. and Class B space registering negative 35,000 sq. ft. The most recent run of overall positive net absorption lasted five consecutive quarters, Q3 2017 through Q3 2018.

Net absorption

For existing buildings, net absorption is the measure of total square feet occupied less the total space vacated over a given period of time. Negative effects on overall net absorption involve 3300 Sidney Brooks Road adding 70,762 sq. ft. into the market. Volt Management Corp. closed its call center at the Brooks master-planned community on the city’s South Side in June, laying off 42 employees. Positive influences on net absorption during the fourth quarter include PNC Bank opening a new operations hub for 550 employees in phase one of Parkview Plaza. The 58,574-sq.-ft. lease is in the Class A flex office and medical space building at 2049 Sundance Pkwy., part of the Sundance Business Park.

Leasing activity

The volume of square footage signed during the fourth quarter was at 411,000 sq. ft.—down from the previous quarter’s 562,000 sq. ft.—and down from this time last year at 661,000 sq. ft. The largest leases signed in 2019—which is comprised of both new leases and renewals— include a renewal for Baptist Health System School (66,263 sq. ft.), PNC Bank (58,574 sq. ft.), and a new deal for Clinical Trials of Texas (19,355 sq. ft.), located in the Northwest, Comal County, and Northwest submarkets, respectively.


Leta Wauson
Director of Research
leta.wauson@naipartners.com
tel 713 275 9618

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