Puerto Rico Commercial Real Estate Market Report: Q1 2026 Trends in San Juan, Guaynabo & Condado
Puerto Rico’s commercial real estate market opened 2026 on stronger footing than the year before, with both retail and office segments posting improved absorption and falling vacancy across San Juan, Guaynabo, and Condado. Here is what the Q1 2026 data shows, and what it means if you are buying, leasing, or investing in commercial property on the island.
Retail Market: Vacancy Falls, Luxury and F&B Expand
Retail vacancy in the San Juan metro fell to 7.8%, down from 9.5% a year earlier, with net absorption of roughly 320,000 square feet. Prime retail corridors are commanding $45 to $85 per square foot annually, while secondary market space runs $18 to $35. Luxury brands and boutique concepts are expanding their footprints in high-demand zones, and experiential retail, especially food and beverage, is driving much of the activity. Average lease sizes have shrunk from about 4,800 square feet in 2023 to roughly 3,600 square feet today, reflecting a shift toward smaller, higher-performing formats.
Office Market: Flight to Quality Continues
Office vacancy improved to 18.5%, down from 21% in 2025, with net absorption of about 150,000 square feet. Class A space in San Juan is leasing for $28 to $42 per square foot, while Class B runs $18 to $27. Hato Rey remains the financial district anchor, Santurce and Miramar are emerging as a tech and startup hub, and Guaynabo continues to be the preferred address for corporate campuses. Hybrid work has stabilized demand rather than eroding it, with tenants favoring flexible lease terms and higher-quality buildings with strong collaboration space, a pattern often called flight to quality.
What This Means for Buyers, Tenants, and Investors
Falling vacancy in both sectors signals a market that has absorbed its post-pandemic oversupply and is now tightening, which typically puts upward pressure on rents over the following quarters. For tenants, that argues for locking in space sooner rather than later, especially in Class A office and prime retail corridors. For investors, improving fundamentals combined with still-reasonable pricing relative to mainland U.S. markets make this a window worth watching closely. Every deal depends on the specific property, tenant mix, and financing structure, so these figures are a starting point for a conversation, not a substitute for a property-specific analysis.
Two20 Group tracks these numbers every quarter as part of advising commercial and residential clients across San Juan Metro Area, Guaynabo, beyond. If you are weighing a purchase, lease, or sale in this market, reach out to our team for a property-specific read on where things stand.