Holding its own—San Antonio’s commercial real estate market 2017

​​​SAN ANTONIO – Below is a sector-by-sector look at how the market is and what is expected for the year ahead:

Industrial

Increase in demand and a handful of other transactions, pushed industrial absorption past 323,600 sf in fourth quarter 2016—boosting year-end absorption to nearly 1.7 million sf.

Rents and vacancy rates remained stable, largely due to the massive increase of newly delivered space.

Michael Morse, REOC San Antonio’s vice president of brokerage services​, explained that San Antonio continues to be a rising competitor on a statewide scale.

Morse continued to say that it is increasing the demand of larger spaces to accommodate tenants and buyers.

Retail

The market closed last year with more than 950,000 sf of positive absorption, with neighborhood center properties leading with the most in-demand.

The city is expecting almost 600,000 sf of new retail development to be delivered throughout the year.

Last year, the citywide vacancy rate dropped to an impressive 7.6 percent—a healthy dip below the 8 percent recorded in 3Q 2016.

Office

The city posted record absorption of about 1.3 million sf—but not quite, as much as the 1.9 million sf recorded in 2000.

REOC San Antonio reported strong vacancy rate of 11.6 percent for Class A properties, which translates to rising rental rates. The citywide average is now $23.82 per sf on an annual, full-service basis.