San Antonio Office Market Report
2023 Investment Forecast
Concentration of Recession-Resistant Industries Helps
Mitigate Vacancy Concerns; Buyers Active in Northwest
Prominent public employers insulate office sector from macroeconomic shocks. San Antonio boasts a diverse office-using employment base, helmed by substantial national defense and healthcare sectors. Though the economic outlook remained fluid as of late 2022, these relatively resilient segments are expected to continue recruiting personnel into this year, limiting upward movement on vacancy. The metro’s status as the nation’s second-most prominent cybersecurity hub will facilitate an additional backstop for office demand, due to the independent nature of information security threats. Together, these factors will keep availability in the Alamo City well below other major Texas markets through the end of this year. Nevertheless, robust development activity will likely keep local vacancy significantly above the long-term average of 12.5 percent. The two-year completion total at year-end 2023 will exceed 2.5 million square feet, the most rapid pace of additions over such a span since 2009.