San Antonio's commercial real estate market is experiencing diverse trends across different sectors. While the multifamily market faces an influx of new construction and temporary rent reductions, the office sector remains relatively stable and retail continues to thrive.
After experiencing soaring rental prices during the pandemic, San Antonio tenants are finding some relief as landlords offer incentives like free rent, waived application fees, and other perks to attract renters and fill their buildings. However, this trend might change as the market absorbs the significant increase in apartment construction over the past two years. The commercial real estate sector in San Antonio has seen diverse performance across different segments.
While multifamily developers have been rapidly constructing new apartments, leading to increasing competition and temporary rent reductions, the office market has remained relatively resilient, with occupancy rates lower than in other major cities. Retail has emerged as a bright spot, with a low vacancy rate and a continued demand for storefront space, defying predictions of the e-commerce industry's dominance over traditional brick-and-mortar establishments.In 2024, San Antonio saw the construction of 12,858 apartments, almost double the usual annual rate. This surge in supply led to a 2.3% decrease in average asking rents. To entice tenants, landlords are offering concessions such as free weeks of rent, free parking, and waived application fees. As construction slows down in the coming years, experts predict that rents will stabilize in 2025 and increase modestly in 2026, potentially leading to less favorable conditions for renters.The office sector, while experiencing higher vacancy rates compared to pre-pandemic levels, remains relatively stable in San Antonio. The city's vacancy rate of 17.5% at the end of 2024 is lower than many other major cities, partly due to a lack of large office buildings and a diverse economy with many jobs that cannot be performed remotely. The return of workers to offices is also contributing to the stability of the market. The retail sector in San Antonio is flourishing with a low vacancy rate of 4% at the end of 2024. This strong demand for retail space has been unexpected given the growth of e-commerce. Malls and shopping centers continue to attract tenants, indicating a healthy retail market in the city
COMMERCIAL REAL ESTATE MULTIFAMILY OFFICE MARKET RETAIL SAN ANTONIO TEXAS
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