For San Antonio employers, the future of work-from-home and hybrid arrangements is uncertain, but the impact on the office market appears to have stabilized for now, real estate trends suggest.

Around 1 in 7 people in San Antonio’s workforce worked from home in 2021, according to new U.S. Census Bureau figures released last week. It’s a jump from 2019, when about 1 in 25 worked remotely.

San Antonio’s newly minted remote-working class isn’t as big as that of Washington, D.C., where nearly half of employees are working remotely, or even tech-heavy Austin, where about 2 in 5 work remotely.

But it’s still big enough to have put a dent in San Antonio’s office real estate market —in terms of both leasing and demand — and to quicken what one analyst calls the “flight to quality.”

Many employers have fled older office buildings and are moving into newer buildings with more amenities, like the kind found at the Pearl, along Broadway and on San Antonio’s far North Side.

“Many larger companies planning a return to the office want that younger crowd, and those workers want newer, walkable environments,” said John Taylor, the managing director of the San Antonio office of JLL, a commercial real estate analyst group.

High-end offices that are newly built or under construction like the Soto and the Jefferson Bank building are almost entirely leased, Taylor said.

The turbulence and uncertainty that remote work presented for so many employers, office landlords and developers may be lessening.

The rising vacancies and office subleases that defined much of the previous year — such as USAA subleasing portions of its large office complexes — slowed in the second quarter of this year, according to a JLL report released this summer.

For more than a year, Frost Bank, one of San Antonio’s largest office employers, has had about a third of its workers in the office, another third working in a hybrid format and the remainder almost entirely remote, spokesman Bill Day said.

“We don’t expect that to change anytime soon,” he said.

Daniel Khalil, a senior market analyst at the San Antonio branch of CoStar, a real estate market data company, says the decision of large employers has ripple effects throughout the rest of the office sector. He, too, sees remote work and its effects on office real estate as having largely stabilized.

“We might be at a new normal,” Khalil said. “Work from home is here to stay.”

Khalil said that even while national estimates used by CoStar show in-person attendance was down roughly half from pre-pandemic times, that doesn’t mean office space has or will be cut in half. “If you have the same size team, and they’re coming in half the time, you’re still going to need a conference room,” he said.

Khalil also said that demand for office space will likely continue to increase in the long term. “At the end of the day, San Antonio is still a growing city,” he said.

But for now, office construction has slowed, reports from real estate analysis groups show. That’s due not just to companies’ reduced appetite for office space, but also because of continuing supply chain wrinkles and rising interest rates that have made construction more costly and complicated.

JLL’s second-quarter report showed most new office construction happening in San Antonio’s midtown area, followed by the far northwest.

While many analysts believe remote work is likely to stay and have an enduring impact on the office sector, some expect the pre-pandemic arrangement to reassert itself in the coming years.

A major survey from Microsoft released this week found a significant gap in views on remote work between workers and managers. The survey, which sampled more than 20,000 staff across nearly a dozen countries, found that nearly 9 in 10 workers felt they worked more efficiently from home. Meanwhile, 4 in 5 managers disagreed.

“We think there’s going to be a strong pushback against remote work,” Taylor said.

Waylon Cunningham covered business and technology for the San Antonio Report.