Is San Antonio the Complete Package?
Throw a dart at a map of San Antonio and it'll probably land on a booming area. Westover Hills is teeming with development, Pearl Brewery is adding a hotel and more retail near downtown, and we could go on. It's because of that increasing activity that we're excited to host Bisnow's State of the San Antonio Market event on Nov. 11 (starting at 7:30am) at the Sheraton Gunter San Antonio.
Silver Ventures Real Estate began transforming the iconic old Pearl Brewery with the purchase of the 22-acre site in '01. The first tenant opened in '09 and since then the development hasn’t stopped. Managing director Bill Shown (a panelist at the San Antonio State of the Market event) tells us the latest plans include a new restaurant and brewery opening before the end of the year, a 146-key Kimpton Hotel opening in the spring, and a 124-unit upscale multifamily project scheduled to open by year-end '15.
Bill tells us the hotel is the best use for the historic building, which dates back to the 1890s. He says they wanted to create something "public, so more people can enjoy the spaces." The existing residential is geared toward a younger demographic, he says, but Baby Boomers also wanted space. So, condo-style rental units are under development, too. There are four development sites around the Pearl campus that will start pre-development in the next few years, too, he says. One site on Broadway will feature commercial space on the ground floor with office; there are also parks and plazas being developed throughout all the public spaces, he says.
Another panelist, Charles Martin Wender Real Estate & Investments founder Charles Martin Wender (here talking to some students), is the father of the 3,500-acre Westover Hills mixed-use master-planned development. Not only is it home to Sea World of Texas and the Hyatt Regency Hill Country Resort Hotel (pictured below) but also several corporate campuses such as JP Morgan Chase, QVC Network, The American Funds/Capital Group Cos, and the Alamo Colleges Northwest Vista Campus. Additionally, Westover Hills is home to seven major data center facilities, including Microsoft and Valero.
Marty says infrastructure has been an integral part of his long-term planning since launching the project in '83. Not only is the west side of San Antonio seeing residential growth, but there's cheap and ample electricity and fiber optics, built to serve companies like data centers and financial services. He’s seeing growth from companies like Wells Fargo, Kohl’s Operations Center, Nationwide Insurance, Hartford Insurance, and Frost Bank, among others. He says another reason companies like the area is because of the protective covenants put in place that prevent billboards, pole signs, etc. “We monitor the growth and keep it in check,” he tells us. Westover Hills should be built out within the next five to 10 years, he says.
In the past year medical has boomed in San Antonio with $450M of construction going on with University Health System recently opening a 400-bed hospital, says South Texas Medical Foundation prez Jim Reed (in Dubai last week meeting a local). He tells us the foundation - which dates back to the '40s - arranges leases to benefit the future development of the Medical Center. Priority is given to institutions providing research, education, and selected medically related services that are associated with those priorities. The foundation arranges leases on the Medical Center campus land. In the next two to five years, University Health System will refurbish another 400-bed facility, he says. Plus, Methodist is adding about $250M to its facilities and the University of Texas Health Science Center-San Antonio will have a new oral health building open next summer. Bill says he’s hoping the campus can attract more research facilities.
The multifamily market is bursting, Institutional Property Advisors-Texas executive director Will Balthrope tells us. His team is currently marketing 1800 Broadway and Tacara at Westover Hills, among others and is closing on Bulvarde Oaks. He’s seeing increased interest from institutional investors in the market because of the city’s rapid growth. The perception of San Antonio is changing from a secondary market into a primary market, Will says, because of the city's rapid growth and strong employment forecast. For example, medical jobs are on the rise. He’s also seeing renters seeking out space in close proximity to the downtown core as the urban trend seen in Dallas and Houston is finally hitting here. Will is a proud third-generation San Antonio native. He graduated from Alamo Heights High School and his dad, Bill, was the mayor of Alamo Heights for 16 of his 22 years on the City Council.
San Antonio Commercial Advisors CEO Ed Cross (another panelist) just wrapped up a 500k SF build-to-suit for Carrier—it’ll be a regional distribution center for the Mexican AC manufacturer. San Antonio has long wanted to be a distribution hub for Mexico, and this is the first time it’s happened; Ed hopes there will be more from here. Here's Ed with his son Ted hiking down the Bright Angel trail at the Grand Canyon. It kicked off a nine-day white water rafting trip.
Ed’s real love is Downtown (he says brokerage pays the bills that let him play Downtown, and he loves visiting other cities’ CBDs, too). He’s done lots of work in the submarket, from bringing Southwestern Bell’s HQ there in ’92—which made his career—to marketing the old Valero HQ/AT&T buildings (pictured) now for sale or lease. At 433k SF, it’s the biggest vacancy in town, and it’s getting lots of attention so far. He jokes San Antonio is behind the rest of the world, so he’s expecting the Downtown wave that Austin and Houston are seeing now to hit us within the next 10 years or so. (Sign up here!)