The San Antonio medical office market continued its steady performance in Q4 2025, with vacancy holding near 11.8%, reflecting gradual tightening after a peak above 13% in early 2023. Positive net absorption of 235,000 SF outpaced deliveries, signaling sustained demand from healthcare tenants. Asking rents reached $30.18/SF, continuing a multi-year upward trend from $28.90/SF in early 2023, underscoring the market’s resilience. On the investment side, activity remained selective, dominated by private buyers, while cap rates stabilized at 7.5%, indicating cautious optimism. Looking forward, trends point to moderate rent growth and stable vacancy through 2031, driven by durable healthcare demand and measured development, positioning San Antonio as a steady, resilient medical office market.

 

San Antonio Demographics

Source: CoStar Group, Inc.

Unemployment Rate: 3.8%

Households: 1,015,139

Current Population: 2,796,101

Median Household Income: $78,392

 

Rents

Asking rents in San Antonio’s medical office market continued a steady upward trajectory, reaching $30.18/SF in Q4 2025, up slightly from Q3. Over the past three years, rents have risen consistently from $28.90/SF in Q1 2023 and $28.25/SF in Q1 2022, reflecting a gradual but durable growth trend. Growth has been steady quarter-to-quarter, typically in the $0.10–$0.20 range, underscoring a stable demand environment. This long-term progression signals confidence from tenants and landlords alike, highlighting San Antonio’s medical office market as a reliable sector for income stability and predictable rent growth.

 

Market Asking Rent Per SF

Source: CoStar Group, Inc.

 

Vacancy

Vacancy in San Antonio’s medical office market showed signs of stabilization in Q4 2025, dropping to 11.8% from 12.3% in Q3. This marks a gradual decline after peaks above 13% in mid 2023, signaling that leasing activity is absorbing new and existing space. The past three years, vacancy has oscillated between roughly 12–13%, reflecting a balanced market with moderate supply pressure. The recent dip shows that demand is keeping pace with deliveries, providing landlords with more consistent occupancy levels and reinforcing the market’s reputation as a steady and resilient medical office sector.

 

Vacancy Rate

Source: CoStar Group, Inc.

 

Construction

Construction activity in San Antonio’s medical office market moderated sharply in Q4 2025, with 105,084 SF under construction, down from 268,458 SF in Q3. Net deliveries of 163,374 SF supported absorption, reflecting continued but measured expansion. Compared with earlier cycles, where construction consistently exceeded 400,000–600,000 SF under way, current activity indicates a more disciplined development pace, aligned with steady demand and stable vacancy levels. Overall, the trend points to a balanced supply pipeline, supporting market stability and sustained leasing performance.

 

SF Under Construction

Source: CoStar Group, Inc.

 

Sales

Investment activity in San Antonio’s medical office market remained selective in Q4 2025, consistent with prior quarters but well below the larger mid-year peaks. The number of transactions totaled 29, in line with the past three quarters of 2025, reflecting stability for medical office assets. The quarter’s top transaction was 738 W Loop 1604 N, a fully leased triple-net property in the Far West sub market, which sold for $4.19M ($631/SF) at an 8.19% cap rate. Cap rates stabilized at 7.5%, slightly above Q3, as buyers remained cautious amid broader market volatility. Smaller, private transactions made up the remainder, signaling that investors continue to favor well-located, leased properties while selectively deploying capital.

By the Numbers

Q4 2025 | Source: CoStar Group, Inc.

# of Sales: 29

Cap Rate: 7.5%

Price Per SF: $380

Vacancy Rate: 11.8%

Rent Growth: 0.59%

Asking Rent Per SF: $30.18

SF Under Construction: 105,084

SF Delivered: 163,374

SF Absorbed: 235,504