Office remains tenant-friendly, industrial is split (Austin oversupplied, San Antonio steady), and retail is balanced. Multifamily demand is improving as pipelines peak.
Quick Takeaways
- Austin Office: Vacancy ~23–25%, record concessions.
- San Antonio Office: Vacancy ~14–15%, stable demand.
- Austin Industrial: Vacancy 18%+, heavy new deliveries.
- San Antonio Industrial: Vacancy 7–8%, steady absorption.
- Retail: Tight, ~5–6% in both metros.
- Multifamily: Austin working through supply; San Antonio steady.
Vacancy Snapshot: Austin vs San Antonio
Vacancy trends tell a story of contrast. Austin’s office and industrial sectors remain challenged with elevated vacancy, while San Antonio shows healthier, more balanced fundamentals across the board.
Commercial Property Prices Year-over-Year
According to Green Street’s CPPI, commercial property prices rose 2.7% year over year as of August 2025. Values remain below 2022 peaks, but the modest rebound suggests selective investor confidence.
Capital Markets Update
Green Street’s CPPI is up 2.7% YoY (Aug 2025), though values remain below 2022 peaks. Lending is conservative, but Sun Belt markets like San Antonio and Austin continue to attract equity thanks to job and population growth. Expect more JV and partial-sale structures into 2026.
Forecast into 2026
• Office: Austin stabilizes only once construction halts; San Antonio remains balanced.
• Industrial: San Antonio keeps steady demand; Austin works through vacancy before rebounding.
• Retail: Stable, with neighborhood centers outperforming big-box.
• Multifamily: Austin improves as supply slows; San Antonio grows steadily.
FAQs from Investors & Tenants
Q: Is it a good time to lease office space in Austin?
A: Yes — record tenant improvements and rent packages available.
Q: Where are the best industrial investment opportunities in San Antonio?
A: I-35 and I-10 corridors for logistics remain attractive.
Q: Will CRE values rise in 2026?
A: Moderate gains in industrial and retail; Austin office lags.
Strategy Notes
- Owners: Lock in credit tenants in San Antonio; reposition Austin office stock.
- Tenants: In Austin, negotiate hard; in San Antonio, suburban Class A is solid value.
- Investors: San Antonio industrial safest; Austin industrial may present long-term plays.
Final Thoughts
As we close out 2025, Central Texas commercial real estate shows a tale of two markets. Austin faces elevated office and industrial vacancy, but long-term demand drivers remain strong. San Antonio’s fundamentals are steadier, offering stability for owners and investors. Retail is holding firm in both metros, while multifamily continues to absorb at a manageable pace.
At Alamo Ad Valorem, we know property taxes can weigh heavily on investment performance. Our expertise in appeals and tax strategy across Austin and San Antonio helps owners protect returns and keep properties competitive. We stand ready to support your 2025–2026 plans.