USAA Inks Leases On Two Entire New Buildings
Keen market watchers have been showing concern about all the new Class-A office space in San Antonio. With USAA’s decision to expand its footprint by leasing two new buildings, some of those concerns are being assuaged. To hear what other factors are keeping San Antonio's commercial real estate experts up at night, join Bisnow at the upcoming San Antonio State of the Market on Sept. 29.
The financial services giant inked leases in Vista Corporate Center (pictured) and Westridge Two at La Cantera, both in the city’s Northwestern submarket. The two spaces combine for 286k SF, giving the submarket's occupancy rate a jolt. Transwestern's Russell Noll and Drake Commercial Group’s Deborah Bauer repped Galleria Ventures, the developer of Vista, for a 157k SF office lease. JLL VP Dan Pollard repped USAA. The 129k SF lease at La Cantera’s Westridge Two was handled by JLL’s Chuck King and Lisa Mittel, reports the San Antonio Business Journal.
The leases are part of USAA’s plan to move nearly 1,500 employees from its HQ along I-10 to the two new offices. The move will primarily impact the company's IT and banking operations, creating more room at USAA’s HQ for additional service representatives. The relocation isn’t planned till fall 2017. USAA will also increase the number of employees in One Riverwalk Place, Downtown property it purchased about three years ago. USAA has more than 17,000 employees in San Antonio.
USAA may be gobbling up office space, but it's also shuttering financial centers. Earlier this month, it was announced the firm would close 17 of 21 financial centers in 10 states, including two in San Antonio. According to USAA spokesman Matt Hartwig, only 2.5% of USAA members used the centers.
“This is really about how do we best serve our members today and in the future when they’re telling us that digital channels are increasingly how they like to interact with us,” Hartwig told the San Antonio Express-News. “99% of what you can do in a financial center you can do on the mobile app.” San Antonio's affected locations are at the Alamo Ranch Shopping Center at 5619 Loop 1604 and at the Market Forum at 14975 Interstate 35 in Selma. Hartwig insists the closures are not financial decisions.
And yet, USAA’s plans come in the wake of disappointing 2015 profits. USAA’s net income plunged to $2.3B in 2015 from $3.4B in 2014, a decrease of about 33%, the company disclosed in a report posted earlier this year. However, revenue did rise slightly to $24.4B from 2014’s record-setting $24B.
USAA has been on a rapid growth trajectory, which has been good news for San Antonio. For a decade, the company has grown by about 6% to 12% annually. The company has added about 4 million members since the end of 2009 when it simplified its membership guidelines. In a speech at St. Mary’s earlier this year, USAA CEO Stuart Parker said that pace of growth won’t continue.
“We’ve ratcheted back and said we’re not going to grow that fast,” Parker told the audience. “What I would submit is, you want the goal to be quality growth, not just growth. We could grow faster if we wanted to. But what’s important is the quality of the relationship that we’re building. We’re going to spend time with the existing members and deepen the relationship.” And that'll now be happening from new, amazing offices.