SAN ANTONIO–If the second quarter is any indication, the local office market is set to outpace 2013. Net absorption for the second quarter was 276,155 square feet, bringing the total for the first half of 2014 to 629,382 square feet, according to CBRE‘s MarketView report.
“The steady increase in demand has spurred cautious development and landlords are willing and continuing to reinvest in their properties,” Steve Thomas, first vice president of CBRE, tells GlobeSt.com. “Across the board we see steady growth and I think we will see continued improvement in San Antonio.”
Vacancy in the office sector fell by 80 basis points from last quarter to 16.8%. At the same time gross asking rental rates rose by $0.26 per square foot to $20.00 per square foot.
“Rents are rising to a level that will substantiate new, quality construction,” Thomas says. This proves to be true by the 443,960 square feet of new office projects that broke ground during the second quarter.
According to Thomas, the growth, rental rate increases and the new development projects are attracting institutional capital and buyers who are seeking investment opportunities.