San Antonio’s CBD submarket reported the largest net absorption in Q4 2017. The Northwest submarket followed with healthy leasing activity. This progressive activity pushed 2017 annual net absorption to 426,235 sq. ft.
Steady positive movements, with the absence of new deliveries, compressed the market’s vacancy rate to 14.4%, down 30 basis points (bps) from a year ago.
Weighted average asking rents (FSG) for office product grew 3.8% during the trailing four quarters ending Q4 2017. Growth was largely anchored by Class A product, which has grown 4.9% during the same period. Separately, NNN asking rents for Class A spaces averaged $22.09 per sq. ft.—a 9% growth rate since Q4 2016.
The office market saw no new deliveries, however, construction continued on six projects totaling 895,000 sq. ft. with an expected pre-leased rate of 40%.