San Antonio, TX Medical Office Market Report Q2 2026
San Antonio’s healthcare real estate market showed modest softening in Q2 2026, but it remains the clear defensive standout relative to the office sector, which is bracing for vacancy spikes tied to major corporate relocations. Medical space continues to draw steady demand from small-to-medium clinical users, even as citywide vacancy edged higher and net absorption turned negative. The market is increasingly bifurcated by location: submarkets along the city’s major highway loops are thriving, while older, centrally located medical buildings are seeing the bulk of the softness. Construction activity has pulled back sharply, and investment sales remained active with 22 transactions in the quarter.
Key Findings
- Healthcare continues to outperform San Antonio’s broader office sector, with strong clinical occupancy insulating medical property owners from the vacancy pressures hitting traditional corporate space.
- Leasing activity is concentrating along Loop 1604 and I-10, with the Far West (Westover Hills) and Far Northwest submarkets emerging as clear demand hotspots as providers follow residential growth outward from the urban core.
- Proximity to major hospital systems, particularly the South Texas Medical Center, is driving a measurable rent and occupancy premium for adjacent medical office buildings.
San Antonio Demographics
Source: Oxford Economics
- Unemployment Rate: 4.1%
- Households: 1,034,983
- Current Population: 2,824,594
- Median Household Income: $81,016
San Antonio Medical Office Rents
Asking rents held essentially flat at $29.99 per SF in Q2 2026, up just 0.13% year-over-year after several years of steady gains. Rent performance varies significantly by location and building type. Properties near established hospital clusters continue to command a premium over non-proximate medical space, helping offset softer conditions elsewhere. Demand from smaller clinical tenants, including dermatology, orthopedic, and physical therapy practices, continues to support rents even as overall growth decelerates.
Market Asking Rent Per SF
Source: CoStar Group, Inc.
San Antonio Medical Office Vacancy
Vacancy rose to 12.27% in Q2 2026 for the third consecutive quarter, driven by -18,423 SF of negative absorption. That headline number masks a clear geographic divide. Vacancy is rising mainly in older central-city medical buildings as providers follow residential growth outward. However, submarkets along Loop 1604 and I-10, particularly Far West/Westover Hills and Far Northwest, continue to post strong net absorption. Buildings adjacent to major clinical hubs like the South Texas Medical Center remain especially insulated from the broader uptick.
Vacancy Rate
Source: CoStar Group, Inc.
San Antonio Medical Office Construction
Development activity has slowed significantly. Space under construction fell to 80,128 SF in Q2 2026, down sharply from the 2022 peak and from the pipeline seen as recently as mid-2025. With only 22,681 SF delivered this quarter, new supply isn’t adding meaningful vacancy pressure. Instead, leasing activity is being shaped by tenant demand, with smaller, divisible spaces suited to compact private practices in high demand relative to large-format development.
SF Under Construction
Source: CoStar Group, Inc.
San Antonio Medical Office Sales
Investment activity held steady with 22 transactions in Q2 2026, reflecting continued investor confidence in San Antonio’s healthcare real estate. While cap rates have moved through a wider range over the past two years, settling into the mid-to-high 7% area more recently, this simply reflects the broader repricing seen across commercial real estate as rates have risen, and healthcare has weathered it better than most sectors. Medical office buildings, especially those near major hospital clusters like the South Texas Medical Center, remain a sought-after defensive play thanks to long-term clinical leases and low tenant turnover. That stability is helping cap rates hold up better than in the struggling office sector. Looking ahead, steady small-practice leasing demand, paired with limited new construction will continue to support fundamentals In addition, investors’ growing preference for smaller, divisible assets points to a deep, active buyer pool for well-located medical properties going forward.
Sales Volume
Source: CoStar Group, Inc.
By the Numbers
Q2 2026 | Source: CoStar Group, Inc.
- # of Sales: 22
- Price Per SF: $190
- Vacancy Rate: 12.3%
- Rent Growth: 0.13%
- Asking Rent Per SF: $30.00
- SF Under Construction: 80,128
- SF Delivered: 22,681
- SF Absorbed: -18,423
