The first high-end office development in the city of Alamo Heights has been delivered in January 2021.
Vacancy increases to 10.8%. The overall vacancy rate in the San Antonio office market is at 10.8%, up 70 basis points from this time last year at 10.1%. The vacancy rate for Class A properties is at 13.0%, up from 12.2% in the prior period. Net absorption (move-ins minus move-outs) of negative 68,000 sq. ft. was up from negative 197,000 sq. ft. at this time in 2019. In addition, 107,000 sq. ft. of new supply has been delivered to the market so far in 2021, with an occupancy rate of 21.8%. Yearto- date through January, the office market has recorded 176,000 sq. ft. of leasing activity— which is comprised of both new leases and renewals—up 20% from one year ago.
Alamo Heights’ new Class A office building. The first high-end office development in the city of Alamo Heights has been delivered in January 2021. The Class A property has 28,000 sq. ft. of office space, with three completed spec suites. Construction of the four-story building started the end of 2019 at 200 Austin Highway, the site of a Bank of America branch demolished in November 2019. Development of this type is common in the surrounding neighborhoods of San Antonio, while new projects in Alamo Heights have been rare. The recent completion of Magnolia Heights, a high-end luxury apartment development next door brought 150 residential units and two ground-floor retail spaces to the neighborhood.
San Antonio economic indicators. According to the Federal Reserve Bank of Dallas, the metro’s unemployment rate fell in December to 7.2% from a six-month high of 7.9% in November. The state unemployment rate also declined in December to 7.2%, while the national rate remained unchanged at 6.7%. Net job growth in San Antonio increased an annualized 4.0% (9,820 jobs) in the fourth quarter. Sectors posting the highest gains were professional and business services (19.0%, or 5,720 jobs), followed by leisure and hospitality (14.9%, or 3,615 jobs) and manufacturing (10.3%, or 1,240 jobs.
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