Subscribe to Our Research Content

  • This field is for validation purposes and should be left unchanged.


San Antonio Office

Download the PDF


The overall vacancy rate in the San Antonio office market was up 10 basis points quarter-over-quarter, and up 90 basis points year-over-year.


Vacancy rate at 10.6%
The overall vacancy rate in the San Antonio office market was up 10 basis points quarter-over-quarter, and up 90 basis points year-over-year. The vacancy rate for Class A properties is at 12.5%, and Class B at 10.2%. In the fourth quarter, overall net absorption bounced back in black to 159,000 sq. ft.—Class A represented positive 230,000 sq. ft. and Class B tallied negative 16,300 sq. ft. Of the 1.8 million sq. ft. currently under construction, 76.0% of that space has been spoken for. Of the 644,000 sq. ft. completed in 2020, 42.4% is available for lease. The overall San Antonio average asking full-service rent is at $23.64 per sq. ft.—up from Q4 2019 at $23.09 per sq. ft.—while Class A space in the Central Business District is averaging $30.30 per sq. ft.

Economic indicators
The Federal Reserve Bank of Dallas reported that San Antonio’s metro unemployment rate increased sharply in November to a six-month high of 7.8%, which is below the 8.1% for the state but above the 6.7% for the nation. Net new payrolls in San Antonio increased an annualized 2.5% (6,160 jobs) in the three months ending in November, with mostly positive but weakening growth across sectors. While job gains have been broad based since May, they have not been large enough to offset the losses in March and April. Local consumer spending improved in mid- November and early December, and the number of small businesses open increased briefly around the Thanksgiving holiday.


CBD CLASS A VACANCY AT 13.8% The CBD has 3.1 million sq. ft. of Class A inventory tracked in 14 buildings with 434,000 sq. ft. of vacant space as of Q1 2021. Class A vacancy in the suburban office market was at 12.9%, while overall vacancy in the CBD registered at 10.1%. There is approximately 9.6 million sq. ft. of medical office space in the San Antonio area, representing 15% of the 63 million sq. ft. of total office inventory. The overall vacancy rate for medical office space is 16.5%, comparable to 16.4% in the prior period.

ALAMO HEIGHTS’ NEW CLASS A OFFICE BUILDING The first high-end office development in the city of Alamo Heights has been delivered in Q1 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 highend luxury apartment development next door brought 150 residential units and two ground-floor retail spaces to the neighborhood.

INVESTMENT SALES ACTIVITY Real Capital Analytics data reports the first quarter sales volume for San Antonio office properties was 45.2 million compared to first quarter 2020 at $141.2 million. The primary capital composition for buyers in Q1 2021 was made up primarily of private investors at 93.8%, and 6.2% institutional investors. For sellers, 100% were private investors. A significant transaction that took place during the first quarter was the sale of the Navarro Building, a 10-story office building in the RiverWalk area. The building and garage at 146 Navarro St. was originally built in 1968, the year the World’s Fair was held in San Antonio. BH Properties has acquired the building that consists of 100,000 sq. ft. of office space above a 605-space parking structure. A capital improvement program to completely transform the office component into institutional quality Class A space is planned.

LEASING ACTIVITY The volume of square footage signed during the first quarter—which is comprised of both new leases and renewals—was at 352,000 sq. ft.—down from the previous quarter’s 823,000 sq. ft., and from 905,000 sq. ft. this time last year. Half the leasing activity took place in the Northwest submarket. As many workers begin to return to the office, there is still uncertainty in future office needs and how office space will be occupied. Another question is how office space design trends will translate to market activity. Clare Flesher, managing director for NAI Partners in San Antonio, said that office tenants had been considering changes such as unassigned workspaces even before the pandemic. But space decisions, including those influenced by market trends, happen at the end of leases.

AVERAGE ASKING RENTS The San Antonio overall full-service average rates are at $23.59 per sq. ft., an increase of $0.35 year-over-year from $23.24 per sq. ft. Asking rates for Class A space are averaging $27.91 and Class B are averaging $21.54 per sq. ft. Increases are due in part to the new supply added to the market. Since the market was healthily prior to the current situation, the relative impact to occupancies and rents in the future is uncertain.

Leta Wauson
Director of Research
tel 713 275 9618

We Want to Hear From You

  • This field is for validation purposes and should be left unchanged.