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San Antonio Office Market Vacancy Spikes to 20%

SAN ANTONIO-Vacancy rose 5.9% while the average rent citywide dropped for the first time in a decade. The dark cloud hanging overhead this year is SBC's threat to exit 90,000 sf in the CBD, action that would boost the 7.4% vacancy in class A to 12%.

By Tim Green | Updated on January 26, 2003

SAN ANTONIO-The San Antonio office market, counting direct and sublease space, rose 5.9% to end the year with a 20% vacancy, according to a REOC Partners report. And, for the first time in 10 years, the average citywide asking rent dropped, going from $17.86 per sf to $17.69 per sf.

While 80,000 sf of positive absorption in the fourth quarter closed 2002 on a positive note, more than 460,000 sf of office space returned to the market during the year. This year, the possibility that SBC Inc. might leave 90,000 sf at the Bank of America building in the CBD looms over the market.

The strongest part of the San Antonio market was the CBD’s class A space. The 7.4% vacancy rate was the lowest in the city; last year, it was 2.3%. The vacancy rate could rise to 12% when SBC vacates the Bank of America building, says Kim Gatley, REOC’s director of research. “It’s prime space,” she says. “And likely to fill quickly.” Vacancy rates in the city’s submarkets were: northwest, 19%; north central, 15%; northeast, 14%; and south, 16%.

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