Tech companies are starting to choose San Antonio over Austin, creating a new tech hub, Kennedy Wilson managing director Ernest Brown tells us. Ernest credits San Antonio’s pricing, cost of living, influx of Millennials and culture. You can get 20k SF of Class-B office in San Antonio for $18/SF, versus $35/SF in Austin, and an apartment that would put you out $1,300 a month in Austin only costs $850 here. San Antonio has the sixth-highest Millennial in-migration in the US (including beating Austin on a percentage basis), and two tech companies recently told Ernest that people they hire in San Antonio stick with them; loyalty is significantly higher here than other parts of the country. And of course, if people love Austin, they can head up there every weekend. Ernest's far left here with colleagues Steve Pyhrr and Butch West.
Ernest thinks Downtown will become even more appealing to tech companies in a few years—when Frost Tower delivers and the city leaves its existing space, a slew of older, smaller buildings will hit the market. Those will create tremendous opportunities for great lofts or creative office, and the amenities surrounding it will be killer.
Ernest tells us tech clients are targeting: short-term leases because they know they’re going to expand quickly, buildings that fit their image (often quirky repurposed facilities), somewhere they feel safe working all hours, and a mix of open and private space. He recently signed a tech client in North Central San Antonio; he tells us the group left Downtown for 2k SF near the airport because its people travel a lot. It also had to leave Downtown because prices have shot up there.
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