SAN ANTONIO, Dec. 19, 2017 /PRNewswire/ -- As the area unemployment rate has declined to a 16-year low of 3.6%, Investment Realty Company (IRC) sees an encouraging future for the commercial real estate market in the San Antonio metropolitan area.
"As 2017 draws to a close, we can consider this past year as the prologue to 2018. The strong job growth has increased demand for new retail space, office space, and industrial space too," said Steve Raub, President of Investment Realty Co. "Implications are that this expansion will continue into the next year, keeping demand for commercial real estate very strong in a city known for its stable growth."
- Retail: Construction will continue to be stable as building lenders remain cautious on approving new projects citing the "Amazon effect". However, strong population and home ownership growth will fuel demand for businesses and in turn increase retail occupancy rates.
- Industrial: New construction will continue to be added to the pipeline up the IH-35 corridor through New Braunfels. The demand will continue to be for more efficient Class A space, which are the newest and highest quality buildings, with Class B space growing obsolete.
- Office: The market has had a huge influx of new office space which has placed downward pressure on occupancy rates. Some examples include the 400,000 square foot Frost Tower downtown and Credit Human's new building at The Pearl. Nonetheless, rents are likely to remain stable given the increased demand.
"On the investment side, property owners are tending to hold on to their properties much longer because they are unsure of what they would re-invest in if they sold," said Raub. "Owners see the high cost per square foot to buy a new property, and decide against selling the property they already know and understand. Consequently, the investment market will remain very tight and expensive for the foreseeable future."
ABOUT INVESTMENT REALTY COMPANY
Investment Realty Company has been creating wealth from San Antonio commercial real estate property since 1975. IRC members and staff have over 100 years of combined sales and leasing experience in forming over 80 commercial real estate partnerships designed to allow individuals, pension plans, corporations and other business entities to invest in both income producing real estate and pre-development land.
SOURCE Investment Realty Company