Supply and Demand Shape Vacancy of Office Market

Holland says if rents increase, San Antonio will be ready for new construction.

SAN ANTONIO—As with most goods and services in a free market economy, the supply and demand for office space can greatly shape the overall strength of the office market in San Antonio. In NAI Partners‘ latest Data Insight, the firm examines current and historical changes in the supply and demand of office space in the San Antonio market, and how those variables shaped levels of vacancy.

New deliveries and strong absorption in 2006 and 2007 led vacancy to decrease from 15.4% to 12.5%. However, as new deliveries continued and demand diminished, vacancies increased from 13% in 2008 to 17.7% in 2012. Since 2012, the supply of new deliveries has remained modest and relatively constant, between 400,000 and 600,000 square feet per year. Meanwhile, recent demand from 2013 to 2015 has been increasing from lows of only 179,000 square feet of positive net absorption in 2011 and negative net absorption of -323,000 square feet in 2012.