Low Business Costs Attract Corporations to San Antonio's Expanding Office Market

SAN ANTONIO, TX — San Antonio (downtown photo above) is transitioning from an often-overlooked secondary office market to a diversified metro with an increasing number of traditional back-office positions and major corporate operations, according to the 2008 National Office Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

San Antonio’s low business costs will support additional major corporate relocations to the area in the future, followed by support companies.

Also included in the report is the firm’s annual National Office Index (NOI), a snapshot analysis that ranks 43 office markets based on a series of 12-month forward-looking supply and demand indicators. San Antonio moves up three places this year to No. 22.

“The investor pool in San Antonio is expected to become more diversified this year,” says Bradley H. Bailey, regional manager of Marcus & Millichap’s San Antonio office. “REITs will up their stakes in the metro, as will out-of-state investors looking for above-average yields in a stable growth market.”

Following are some of the most significant aspects of the San Antonio Office Research Report:

· Employers will create 19,400 new jobs in 2008, a 2.3 percent increase.
· Construction will remain relatively steady this year, with 970,000 square feet forecast to come online, a 3.7 percent increase to stock.
· Demand will outpace supply again this year, causing the metrowide vacancy rate to shed 30 basis points to finish 2008 at 13.7 percent.
· Asking rents are forecast to rise 3.7 percent to $19.57 per square foot, while effective rents advance 4.1 percent to $16.48 per square foot.
· Opportunities can be found northwest of the city center near the rapidly expanding Loop 1604, where demand is currently being generated by companies seeking to relocate closer to residential developments.

In the 2008 NOI, Seattle moved up three places to secure the No. 1 spot, surpassing last year’s leader New York City, which slipped to No. 2. Boston moved up two spots to No. 3, while San Francisco jumped 12 places to the No. 4 position. Los Angeles slipped two spots, coming in at No. 5. (photo of The Alamo landmark at right)

For a copy of Marcus & Millichap’s National Office Report and the complete NOI rankings, visit http://www.marcusmillichap.com/.

Press Contact:

Stacey Corso
Communications Department
(925) 953-1716