San Antonio’s medical real estate market, regarded by some as a bright spot in a weak economy, has seen a slowdown, according to the latest quarterly medical market report from NAI REOC San Antonio.
Leasing activity in third quarter 2010 generated 54,291 sf of positive net absorption, the report showed. This was led by the 12,900 sf lease by the University of Texas Health Science Center at San Antonio at the CHRISTUS Santa Rosa Professional Pavilion downtown.
In all, third-quarter activity boosted the year-to-date total absorption to 107,888 sf of positive net gain, the report showed.
The average quoted full-service rental rate for medical office space climbed 29 cents from last quarter to $22.60 per sf per year –up $0.83 or 3.8 percent compared with a year ago. “Tenants can expect to pay a 10 percent premium for leasing space in a medical-only office building compared to the citywide average of $20.54 in traditional office buildings,” said Kim Gatley, NAI REOC’s senior vice president and director of research.
At the close of the quarter, the citywide vacancy rate improved to 18.4 percent compared with 19.3 percent last quarter. New supply added over the past 12 months pushed vacancy up compared with 17.9 percent recorded last year at this time.
Citywide, medical office properties reported roughly one million sf of vacant space compared with more than five million sf of vacancy reported within the traditional office market.