The San Antonio commercial real estate market is many things, and lately one word to describe it is unique. Even as sales and activity continue to pick up in the San Antonio commercial real estate market, rent prices continue to fall. According to NAI REOC San Antonio, asking rents for the fourth quarter of 2009 in San Antonio were down 26 cents to $17.85 per square foot, when compared to asking prices in the same quarter of 2008.
Rental Prices Continue to Drop
With an excess of supply in the San Antonio commercial real estate market, landlords have been forced to drop their prices. Although 26 cents isn’t a huge decrease in price, it becomes quite significant when dealing with large spaces.
Moving Towards a Stable Market
However, even amidst rental price decreases, the San Antonio commercial real estate market is stabilizing nicely after a rocky year. In fact, vacancy rates dropped to 13.7 percent in the fourth quarter of 2009, compared to 14.3 percent in the same quarter of 2008. Many real estate experts find that as vacancy rates decrease the rental prices will soon start to stabilize, thereby creating a more balanced San Antonio commercial real estate market.
The magic number for vacancy rates appears to be 10 percent, and the San Antonio commercial real estate market is clearly headed in the right direction. When that happens, landlords will have more control over their rental spaces, thereby creating more harmony and stability in the San Antonio commercial real estate market.
How we got Here
San Antonio’s retail market saw a big hit in 2009 when some of the area’s major retailers, such as Circuit City, closed up shop. Although San Antonio in general survived better than other areas of the county in terms of its commercial real estate market, it definitely had an effect on the bottom line. Another factor that led to an increase in commercial rental space was that many construction projects that were started before the recession took hold wrapped up in 2009, thereby creating much more available space in the San Antonio commercial real estate market.