The commercial real-estate market in San Antonio remains resilient, particularly when it comes to office space.

Nation-wide the market for offices seems to be declining or stagnating. The San Antonio market is a unique exception. The market for new offices is rapidly expanding. New jobs are pushing up demand for offices in the area and new construction is filling up fast. Even with record breaking construction, the market may not be keeping pace with demand, pushing the price of office space in the area even higher.

The San Antonio area, like much of Texas, is seeing increased job growth. According to a CRBE analysis 24,900 total jobs were created in the region as of May of 2017. Office-related jobs have expanded by 2 percent this year. This job growth is accelerating the demand for new offices, making the San Antonio market a unique exception when compared to the rest of the nation, where demand appears to be leveling off or declining.

The price of office space in the area is at a record high, with an average price per sq ft at 22.54. This price is 2.7 percent higher than it was when compared to the same time last year. The rental price for Class A properties, with triple net leases, went up an astonishing 10.9 percent just since the last quarter. New properties are charging record these record high rental rates. The average price for office space is likely to increase, as new construction in the area escalates. 1.2 million sq. ft. of office space broke ground this year. Low vacancy rates in the area indicate that many tenants are willing to pay the increased prices.

Low vacancy rates, particularly in the case of new offices, indicates rising demand in the area. 40 percent of the 390,000 sq. ft. delivered so far this year is already leased out. The CBRE analysis quantifies 1.2 million sq. ft. of additional office space will be needed to keep up with future demand. Even with all the recent construction in the area, vacancy rates are lower this year.

As is the case with much of Texas commercial real-estate, the market for offices in San-Antonio is expanding.

Even with record breaking levels of office construction, new offices are filling up fast. As jobs move into the area, the demand for office space will only increase. The speed with which new construction is being sold off could indicate that construction is not keeping pace with current demand.

Increased demand will push rents higher in the area. A common trend with Texas Commercial Real-estate

San Antonio will remain an attractive place to do business for many years to come. The low vacancy rate, even in the face of record prices indicates that tenants in the area are willing to pay a premium for office space. With the vacancy rate tightening and the supply of new offices seemingly insufficient to meet current demand, land lords will continue to have greater leverage to charge even higher rents.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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