Open Menu

San Antonio

Market Insight

San Antonio Q3 Market Stats

$27.51
Avg. Gross Rent
10.7%
Vacany Rate
290K
SF Delivered
2.2M
SF Under Construction

Download the Q3 2021 San Antonio Office Market Report

Sign up to get exclusive access to research and insights that detail the state of the real estate market in San Antonio.

Bringing Employees Back to the Office

In a July 2021 poll by Forbes, most Fortune 500 CEOs and other senior leaders said that they plan to have their workforce back in the office by September. But with the recent surge in the Delta variant, many have pushed back this timeline to adopt a “wait and see” approach. As decision-makers try to decide what is the best fit for their businesses; full-time back in the office, fully remote, or a hybrid of the two, they must think about the overall objective of their business and which format is the most feasible. In a survey of 2,404 businesses conducted by The Business Journals, as many as 65 percent of businesses plan on being in some type of hybrid format for the foreseeable future, where employees would have the choice whether to work from home or the office at least once a week.

Similarly, in Digital.com’s survey of 1,250 businesses, 39 percent of companies polled said that they would be closing some of their additional office space within the next 6 months. Many businesses are even allowing employees to set their own hours or to work from wherever they choose, but the overall consensus is that the vast majority of companies will still need office space.

Since the beginning of the pandemic, there has been a debate on the future of office space; many insist that with improvements in technology, work can be done from anywhere without affecting collaboration and productivity. Only time will tell if employees can remain productive at home, and studies have shown that it is better to have a healthy separation between life and work. According to Larry Feldman of Feldman Equities, in the companies that are opting for a hybrid format, we are expecting to see a net contraction of 10-20 percent in the need for office space, and in companies that plan to go back to the office full-time, we are expecting to see a 10-20 percent expansion in the need for office space, which should roughly offset each other in terms of demand for office space. Commercial real estate platform VTS Inc. found that national demand for office space rose 43.3 percent in Q2 2021, only 14 percent below the 2018-2019 average. Many landlords are implementing amenities such as “activated lobbies”, fitness centers, cafes/restaurants, laptop/Wi-Fi areas, advanced air filtration systems, and open floorplans to create an environment that will make tenants want to come back to the office. Many of them are also offering concessions and increased tenant improvements to make their lease terms look more attractive to tenants.

Only 13 percent of companies polled are expected to remain fully remote long-term, most of which are small companies (less than 100 employees), reinforcing the idea that the need for office space will always be there for businesses that want to establish a company culture and a sense of comradery amongst their employees. Many daily tasks can be done remotely but there is no real substitute for face-to-face interaction in a professional setting.

The amount of available sublease space in San Antonio and across the nation continues to drop, and we are continuing to see healthy rent growth. Businesses are back in the market looking for space, and there is a trend of returning confidence in the office sector. Most of the key metrics suggest that the worst has passed and that we are heading in the right direction.

San Antonio Sublease Activity

Quarter Class A Office Class B Office Class C Office Total
2016 Q1 46265 2857 606 49728
2016 Q2 70512 2857 0 73369
2016 Q3 54457 0 0 54457
2016 Q4 54457 3054 0 57511
2017 Q1 64401 11958 0 76359
2017 Q2 34579 10431 0 45010
2017 Q3 51081 9981 0 61062
2017 Q4 32019 6958 0 38977
2018 Q1 34241 6819 0 41060
2018 Q2 50063 8659 0 58722
2018 Q3 44134 15324 0 59458
2018 Q4 46022 15324 0 61346
2019 Q1 121666 44145 0 165811
2019 Q2 122472 53489 0 175961
2019 Q3 136671 94717 0 231388
2019 Q4 133362 100297 0 233659
2020 Q1 169402 99738 0 269140
2020 Q2 321126 134035 1584 456745
2020 Q3 489878 208721 13398 711997
2020 Q4 511419 301832 43759 857010
2021 Q1 544111 342689 45110 931910
2021 Q2 573146 333119 43110 949375
2021 Q3 650348 314902 39574 1004824

San Antonio In the News

San Antonio Ranked #6 City in the US September 2021 Travel & Leisure San Antonio Ranks as One of 10 Strongest Office Markets September 2021 SABJ SA Ranks Among Top 10 Major Metros with Biggest Population Jump From 2010-2020 September 2021 Culture Map San Antonio Metro Among Fastest Internet Speeds in the Country June 2021 SABJ

 

San Antonio Q4 2021 Development Pipeline

Zoom/Click for More Details

 

San Antonio Submarket Map

 

Back to Top