New supply kicks San Antonio office vacancy upward, but not for long

Increasing demand for more variety in San Antonio’s office market has finally been met, resulting in an influx of new construction and with it, higher vacancy rates.

But those aren’t expected to stick around for long.

According to REOC’s latest office market report, more than 263,000 square feet was added to the San Antonio market through three new office structures in the third quarter of this year. As a result of the new supply, the citywide vacancy rates ticked up from 17.5 percent last quarter to 18 percent at the end of September 2015.

However, due to explosive job growth and an increasing interest in companies planting roots in the San Antonio market, that vacancy rate is expected to turn right back around. REOC and the Xceligent Office Advisory Board, both of which surveyed more than 29.7 million square feet of office lease space for the report, expects recent job growth in the San Antonio-New Braunfels metro area to weigh down that rising vacancy. The increase of 35,000 jobs in the area over the past 12 months — an annual growth rate of 3.7 percent — will start to trigger jumps in the market’s occupancy levels.

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Will Austin-San Antonio be the next DFW?

By 2030, the Texas Water Development Board estimates the population of the Austin-San Antonio corridor will grow by a staggering 1.44 million people.

All 13 counties in the corridor are expected to see population gains ranging from 20% to almost 70% according to a Lawnstarter.com report. And though suburbs like San Marcos and New Braunfels are expanding enough to bridge the gap along I-35, the cities of Austin and San Antonio are expected to retain their individual vibes.

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Reporter’s notebook: Tech and transit highlighted the CCIM symposium

Regardless of the changes and growth San Antonio’s commercial real estate market has gone through over the past 12 months, it always boils down to the constants: it’s a cyclical market that will have ups and downs.

But there was a new conversation at yesterday’s 24th CCIM Symposium that got people excited and curious about how consistent those constants would be. The buzz was focused on transportation and technology, both in separate terms and how the two would intertwine and push commercial real estate development into the future.

As part of a panel discussion, Weston Urban President Randy Smith and GrayStreet Partners’ Managing Partner Kevin Covey — both from companies committed to revitalizing downtown San Antonio — repeatedly returned to the point that interest among technology companies in establishing a presence here will only continue to increase.

In part because of the city’s low cost of living, as well as attractive rental rates in comparison to other growing tech hubs across the country, San Antonio — specifically downtown San Antonio — has the opportunity to attract this strong pool of tenants and leverage them for continued urban development, both Smith and Covey said.

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New downtown district could spur more urban redevelopment, San Antonio leaders say

San Antonio leaders are attempting to create a new Downtown National Register District. If they are successful, the payoff for prospective developers would be greater access to critical tax credits, which stakeholders expect will lead to increased redevelopment in the center city.

San Antonio’s Office of Historic Preservation contracted with Main Street Architects in June to help expand the range of historic downtown structures that could be considered eligible for state and federal tax credits. That effort has resulted in a proposed district, which could be approved by the Texas Historic Commission next year.

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Northeast San Antonio could be the city’s next office hotspot

San Antonio’s rising office market has often been attributed to new developments in the northwestern submarket, but there’s another pocket of the city that — despite significant rent gains — has gone largely unnoticed. The northeast.

According to JLL’s latest office insight report, rents in the bypassed area have risen by nearly $5 per square foot over the past three years, going from an average $19.26 per square foot back in 2012 up to $24.24 for the third quarter of this year. That increase has boosted the submarket from the fourth to the second most expensive office area in the city, with the far north central commanding first place.

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Behind the List: Office Properties in San Antonio

Where are the largest office properties in the San Antonio area? If you want to know, the San Antonio Business Journal has ranked them according to total rentable square footage. There is a total of over 8 million square feet of office space represented on this year’s list of the largest office properties in San Antonio.

The largest property is Brass Professional Center with over 761,000 square feet of rentable office space. Located at the corner of Loop 410 and Callaghan Road, it was built in 1970. The oldest building on this list was built in 1918 and the newest building was built in 2009.

San Antonio’s new reputation as a “hip” secondary market expected to fuel investment, development activity

People may have once called it lame, but San Antonio’s reputation among national investors is becoming a whole lot cooler. Or hotter, depending on how you look at it.

According to PwC’s latest Emerging Trends in Real Estate report, secondary markets such as San Antonio are expected to draw in more investment and development activity as both global and domestic investors hunt for better yields.

San Antonio Botanical Garden ready to break ground on $17 million expansion

Over the next few weeks, construction crews will begin prepping the San Antonio Botanical Garden grounds for the first phase of an expansion project that will grow the Broadway-area destination by several acres and add multiple new attractions.

The $16.7 million initiative, which will take about 18 months to complete, is expected to boost the destination’s attendance, and could be key to spurring new investments along the cultural corridor that is starting to take shape along Broadway.

Houston Street seen as downtown’s undervalued thread

Downtown San Antonio is ready for a development renaissance! For land development opportunities, contact JLL’s Scott LaMontagne.

From Katie Burke, reporter for the San Antonio Business Journal:

At the Urban Land Institute’s Infill Workshop this morning, I sat next to someone who summed up downtown’s biggest problem in the clearest way I’ve heard it phrased: Everyone is on the edge of the pool and watching what’s going on inside, but not quite ready to jump in themselves.

The uncertainty that has long shrouded San Antonio’s urban core has created a multi-layered conundrum in terms of what to focus on first — residential, office, retail or leisure.

Speaking to the crowd, Centro CEO Pat DiGiovanni said that the biggest priority for the city organization right now is to make “downtown a special place.”

And that’s going to start by focusing on Houston Street. The 0.7-mile-long stretch is already seen as the most walkable, with plenty of retail opportunities lining the way.

San Antonio outpaces Austin, Houston in millennial gains

Think more young people are moving to Austin than San Antonio? Think again.

For the first time in, well, forever, the rate of millennials moving to San Antonio has edged out the hip Texas metro. According to a Bloomberg report, San Antonio had nearly a 30 percent jump in its millennial population between 2000 and 2013. Austin came in just a bit lower, with a 28 percent rise.

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