Next wave of office projects begin in San Antonio

SAN ANTONIO – According to the latest analysis by NAI REOC San Antonio, San Antonio’s office market ended the second quarter on solid ground. The Class A office sector absorbed a little over 67,000 sf.

The vacancy rate now stands at 10.6 percent — down from 13.6 percent the previous year.

Such a low vacancy rate should be prompting the next wave of development, however, there are some mitigating factors that have compelled developers to err on the side of caution when it comes to pulling the trigger on speculative projects.

There are some previously announced projects that are set to debut in the second half of the year — including the second phase of The Oaks at University Business Park, which will span a little over 101,000 sf; and the first phase of the Ridgewood Business Center, which will measure 65,000 sf.

Rents are another factor. As the office market continues to improve, some tenants may find that they can no longer afford to pay Class A rates — leading to a migration of what were Class A tenants into the Class B properties.

The next building blitz is not far off, however, with construction on the first building of WestRidge One slated to begin during 4Q 2013. It will measure 128,700 sf.

Read more at the San Antonio Business Journal.