Leasing Activity Revs Up, Vacancy Remains Steady
San Antonio's Q2 office market data is in. Research from CBRE shows robust office demand, predominantly in the Northwest submarket, which posted 126K SF in net absorption. Most submarkets, with the exception of South, posted larger move-ins than move-outs.
San Antonio absorbed 226,500 SF in Q2, with a vacancy rate of 14.8%. Despite recent deliveries, Class-A vacancy remains 2.9% below the 10-year average.
Weighted average asking rents for office product grew 2.7% from the same time last year. Growth was largely anchored by Class-A product. More owners are quoting asking rents on a NNN basis, so this segment is seeing the strongest rent growth. When considering only NNN asking rents, Class-A spaces averaged $22.53/SF. This grew by 10.9% from last quarter, largely because of newly delivered product.
New construction was at a near-cycle high in Q1, with 390K SF delivering this quarter with an occupancy rate of 40%. Work continues on the 462K SF Frost Tower, set to finish in 2019, and 218K SF of additional construction is in the pipeline throughout the area.