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San Antonio, TX vs. Houston, TX: Which Is Better for Businesses?

Published: 05-25-22 Category: General CRE

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

Effectively managing a business requires incredible attention to detail and careful planning.

The location of your business is an important component that can directly impact your company’s success.

Choosing the right city will have a direct impact on your bottom line, so you want to make sure you pick the best city for your specific business needs.

Learn more about the pros and cons of operating your business in either San Antonio or Houston.

Population Comparisons

San Antonio and Houston are both large cities in Texas with similar populations.

Both cities have a large number of residents and a diverse multicultural makeup, providing plenty of opportunities for customers to patronize your business: 1,598,960 people live in San Antonio, Texas; 2,325,350 people live in Houston.

Average Demographics

In San Antonio, the population demographics in 2022 were:

Median age 33.1 years old.
50.8% of the population is female.
16.1% of the population is between the ages of 25 to 34.
25.1% of the population identifies as White.
6.5% of the population identifies as Black.
64% of the population identifies as Hispanic.

In Houston, the population demographics in 2022 were:

Median age 32.9 years old.
49.9% of the population is female.
18.2% of the population is between the ages of 25 to 34.
24.9% of the population identifies as White.
22.4% of the population identifies as Black.
44.5% of the population identifies as Hispanic.

Houston is younger and more diverse than San Antonio.

Average Household Income

The average household income in San Antonio is $70,778.

The average household income in Houston is $84,179.

Commercial Real Estate Comparisons

San Antonio and Houston are two of the largest cities in Texas.

With diverse economies and massive populations in their respective regions, a large number of businesses are based in both cities.

Average Commercial Rents

The average cost of commercial rent in San Antonio is:

Class A Office Space: $30.70 per square foot.
Class B Office Space: $22.67 per square foot.
Class C Office Space: $19.43 per square foot.

The average cost of commercial rent in Houston is:

Class A Office Space: $35.48 per square foot.
Class B Office Space: $21 per square foot.
Class C Office Space: $14.20 per square foot.

The cost of renting commercial real estate in Houston is more expensive for Class A spaces.

However, leasing commercial real estate in San Antonio is, on average, more expensive for Class B and Class C office spaces.

Commercial Vacancy Rates

The commercial vacancy rate in San Antonio is 14.34%.

The commercial vacancy rate in Houston is 22.37%.

CRE Market Outlook for 2022

In the future, it’s likely that Houston and San Antonio will continue to grow and develop due to the existing economic environment.

Houston has a much higher population than San Antonio, but both cities have strong economies that provide opportunities for businesses looking for a major metropolitan area in Texas.

Commercial Activity Comparisons

San Antonio and Houston are both very different cities. The cities have many characteristics in common but also differ in certain areas as well.

Since the two cities are so similar, it’s important to do your research before choosing one over the other.

Businesses should consider various local factors when making an informed decision about which city is best for their company’s needs.

Retail: In-Person Shopping Versus Online Shopping

San Antonio and Houston have a strong retail market in their respective regions, with a considerable amount of foot traffic.

Online shoppers in both cities are looking for products from a variety of locations, including brick-and-mortar stores that are located near their homes or workplaces.

Businesses can meet this demand by offering both convenient in-person service and by providing easy access to the merchandise from a website.

Industrial: Warehouse Storage Activity

Houston and San Antonio have a strong presence in the industrial market, due to the fact that both are located near major ports.

Since business owners can easily ship and receive goods from overseas, this provides opportunities for businesses in both Houston and San Antonio.

Both cities also have a large amount of industrial space available for warehouse storage.

Office: Office Space Activity

Houston and San Antonio are two of the most populous cities in Texas, and this has a significant impact on the office market.

Both cities have a strong presence in the office market due to their location, as well as the fact that they offer a diverse set of business industries.

Houston and San Antonio have fairly high vacancy rates, which means that business owners have a higher chance of leasing commercial space in these cities.

Deciding Which Location Is Right for Your Business

When evaluating the potential of a city, you should look at both the business cycle and the population growth forecast.

New businesses in Texas rarely open in a city that’s already saturated with other businesses that are just like it, so it’s necessary to consider the right time to open your company.

The right time to open your business will also help you determine whether it’s better to rent or buy commercial real estate in that area.

Businesses that are set up in a city that has a stable economy will thrive during long-term prosperity.

Businesses should also choose the appropriate location for their employees, as well as their business goals.

Some cities are great for raising a family or for scaling up your brand and providing optimum commercial real estate values.

Both Houston and San Antonio have a stable economy and diverse economies, which give both cities their own set of advantages.

You should consider the benefits, risks, and competitive landscape when evaluating your business’s potential in each city.