In the past, San Antonio may have been in the shadows of other major Texas cities like Austin, Houston, and Dallas, but that’s beginning to change. San Antonio real estate statistics show that the city has had a resurgence of investment in its business district downtown. The new excitement is in part due to an expansion of the University of Texas at San Antonio’s downtown campus as well as other commercial developments and renovations revitalizing the area. Here’s a look at San Antonio real estate market projects going on in the area and supporting statistics.
The UTSA Downtown Campus Expansion
UTSA created a 10-year vision for its downtown campus and has been working to raise $500 million for this project. The school has received some substantial donations including a $15 million donation from Graham Weston, a billionaire who grew up in San Antonio, and a $20 million donation from Carlos Alvarez, owner of the Shiner Brewery.
The university also received gifts from the city and county to help expand its campus onto additional land near its current location. The expansion will take place in four different phases across over 20+ buildings, including a new School of Data Science and National Security Collaboration Center. Both of the initiatives will be located in a building that’s currently being designed by Whiting-Turner|Jacobs|Overland.
This project is a partnership with San Antonio’s high-tech leaders to help set the university and the city apart as pioneers in data science and cybersecurity.
UTSA plans to open the $90 million facility in 2022 on a property adjacent to the San Pedro Creek project located just east of the university’s downtown campus. UTSA’s objective is to connect the west side neighborhoods to the downtown area creating welcoming spaces while expanding the campus.
Economic Development Goals for San Antonio
Recently, the San Antonio Economic Development Foundation (SAEDF) shared a plan to add 140,000 jobs to the city and generate $55 billion in economic impact by the year 2025. The plan is called the All In SATX plan and was part of a collaboration by local small businesses, major employers, economic development organizations, and other interested parties to stimulate economic growth and opportunity in the city.
The city of San Antonio has already added 250K jobs since 2010. And the SAEDF notes that the city has 50 percent more racial diversity than other major metropolitan areas, which includes the largest Hispanic population in the country. San Antonio has also seen a growth of 9 percent in population from 2015 to 2020 and a 9.5 percent job growth during this same time period. The average job growth percentage in the United States is 6.2 percent.
All of this news of growth and development is very promising for the San Antonio real estate market.
San Antonio Real Estate Statistics
San Antonio is one of the more diverse and stable markets in the country. It’s anchored by industries such as tourism, national defense, and healthcare and its economy continue to grow at a healthy rate. Job creation is seeing a boom in the Central Business District as well as the city’s northern submarkets. As a result, San Antonio is seeing a significant amount of transactions in office and retail space.
The current market overview for San Antonio commercial real estate for the first quarter of 2021 shows that the vacancy rate is up at 11.1%. The vacancy rate was at 9.3% at this time last year. The number of properties under construction is also up at 2,184,791 square feet. The city was at 1,873,632 square feet during the first quarter of 2020.
The average gross rent in all classes is up at $23.60 full service per square foot from a rate of $23.23 during the first quarter of 2020. However, it’s down from the fourth quarter of 2020 when the rate was $23.63.
San Antonio Real Estate Statistics – Submarkets
Far North Central: This area is one of the busiest submarkets on the perimeter of Loop 1604. It’s home to upscale communities like Stone Oak and Encino Park and offers a mix of quality office space and retail space. In this area, class A office space goes for as much as $31.56 per RSF with a vacancy rate averaging 13.9%. The Far North Central area also commands the highest rates for Class B office space at $32.92 per RSF.
North Central: The North Central submarket is very active for investors in San Antonio. It’s located along US 281 from I-35 to Loop 1604. It includes the San Antonio International Airport, Midtown, and Brackenridge Park. The vacancy rate in this submarket for the first quarter of 2021 for class A office space was 14.9% and it was 16.6% for class B office space. Class A rental rates average $27.45 and class B averages $21.96.
Northwest: This part of San Antonio is home to UTSA’s main campus as well as the city’s Medical Center District. It stretches from downtown to Loop 1604 and follows most of the I-10 corridor. This area has some of the lowest rental rates for office space in the Northwest submarket where the averages are $27.61 for Class A and $20.12 for Class B. The vacancy rate here averages 10.6%.
Far Northwest: This submarket of San Antonio has upscale shopping, including The Shops at La Cantera as well as Six Flags Fiesta Texas. It’s located around the I-10 corridor and Loop 1604. Currently, vacancy rates here for class A space is at 13.8% and it’s at 52.8% for class B space.
Far West: The Far West Submarket is a very fast-growing part of San Antonio. It’s seen rapid growth in retail and multi-family markets and is close to Sea World and Lackland Airforce Base. The average price for class A rental space is $30.30 and for class B it’s $23. Vacancy rates here are very low at 3.4% for class A and 4.3% for class B space.
Central Business District: Finally, the central business district, where much development is happening, is one of the quickest growing markets for office space and is appealing to investors interested in large assets. It’s in the heart of the city where the UTSA downtown campus is along with the Alamo and River Walk. Average rates for rental space in this submarket are $27.97 for class A rental space and $24.18 for class B rental space.
San Antonio real estate statistics demonstrate that it is one of the state’s fastest-growing metropolitan areas these days. With plenty of undeveloped lands, promising cap rates, and new growth and development downtown, the San Antonio real estate market continue to be an attractive location for commercial real estate investors.