MARKETS:
Office
San Antonio is well insulated from the broader U.S. market, having an office vacancy rate 200 basis points below the national average.
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Vacancy is
above
This is thanks to the discipline of SA developers not to overbuild and a cautious approach to lending exhibited by bankers who want 100% preleased space. Rents are expected to increase in a way that exceeds the national average, but at a decreasing rate as rent growth subsides.
Overall, rent will go sideways and cap rates will remain high until major players begin moving and large offices are occupied again. Medical office is immune to these trends thanks to San Antonio's strongly diversified economy and South Texas Medical Center which keeps these smaller buildings occupied at higher rents.