Credit:
Leta Wauson
Director of Research
leta.wauson@naipartners.com
Market Highlights
Office market vacancy steady. Overall vacancy in the San Antonio office market ranged between 9.7% to 10.0% in 2018. Current vacancy is 10.5%, up 70 basis points from this time last year. Of the 1.5 million sq. ft. currently under construction, 66.7% of that space has already been spoken for. The 460,000-sq.-ft. Frost Tower in the central business district is approximately 70% leased prior to completion at the end of the first quarter. Many companies are making leasing decisions with a focus on employee attraction and retention and viewing downtown as a place where workers want to spend their time before, during, and after work.
Expanding business park at North Loop 1604. Pinnacle Oaks, a 21-acre master-planned business park located off of North Loop 1604 West in San Antonio is currently planning to break ground on the project’s next phase, named Pinnacle Oaks Centre 1, this summer. It will include a Class A five-story, 154,000-sq.-ft. office building scheduled to be completed in the summer of 2020. The first phase of the project, the 80,532-sq.-ft. Pinnacle Oaks Tech Center, broke ground late 2017 and finished construction in 2018. Once fully completed, the business park is planned to include 500,000 sq. ft. of Class A office space.
San Antonio remained healthy in 2018. The unemployment rate increased slightly to 3.4% in December, up from 3.2% in October. Though some sectors were weak due to the tight jobs market, overall job growth in San Antonio in 2019 should be similar to the state as a whole, somewhere between 1 and 2%, reported the Dallas Fed. Low unemployment can be problematic when it comes to economic development in some of the city’s industries, especially tech and manufacturing, when there aren’t enough qualified workers for the number of job openings that exist. Capitalizing on population growth and developing the local workforce will be in focus during 2019.