BIG construction taking place in San Antonio
August 20, 2024
Real Estate certainly seems in the doldrums.
The market had surged strongly after Covid and peaked on April Fools’ Day 2022, but fell apart so fast that within six weeks buyers went from making above-asking-price offers to walking away from deals because real estate was no longer the hot asset class.
The markets bottomed late last year according to the analysts at Green Street with apartments increasing 5% in value, other sectors up a little but office buildings are lagging. There has been some forced selling in troubled assets, particularly older office buildings, but a low volume of sales has been more characteristic this time around, as strong hands do not want to sell at the bottom of the market.
Sales volume will be restored when values move significantly higher, which they will do over the next two years, as interest rates come down and confidence in real estate as an asset class is restored. Commercial real estate is a slow-moving asset, without the volatility of stocks and bonds, and that stability is one of its most attractive qualities.
Major Projects underway in San Antonio
Let’s look more closely at our own little slice of Texas. Homes are moving more slowly, but the long-term outlook is very bright. As I read, I am impressed at the dynamism of our fair city. Let me present with you a ‘brief’ overview of major projects underway.
Data Center in Texas Research Park
While there are a total of 13 datacenters in Texas Research Park and 14 in Westover Hills, Microsoft is still expanding their enormous datacenter campus at the TX Research Park on the Far Westside with a 225,000 SF building. MS has approximately 2m square feet now in that Park and Westover Hills. Stream Data Centers has started its first $400m data center on its new campus off of Loop 1604 at W. Military with a 1.5m SF build out planned. CyrusOne DataCenters is beginning a second facility at its Tx Research Center site and another planned.
Alamo Plaza
Going Downtown, Alamo Plaza’s $504m renovation is well underway with the remodel and update moving the Cradle of Texas Liberty into the 21st century. Watch for the prospect of a Sports and Entertainment District based at the former Institute of Texan Cultures site next to the Hemisfair Park development that would house our Spurs. Also, on the sports front, we can also hope for a new Triple A baseball field complex in NW downtown. If this doesn’t come to pass San Antonio may lose our little Missions Double A ball club altogether.
Hilton Hotel by Zachry
Now under construction in HemisFair Park is a 17-story 200 room Hilton Hotel by Zachry. Intercontinental Hotel’s 21-stories on the Riverwalk just opened, as did the Kimpton on S. Alamo. Add a 171 room Residence Inn at 100 N. Main and the El Tropicana’s renovation, then this is the biggest surge in hotel building since we added 570 rooms in 2018.
Weston Urban Mixed-Use Residential Complex
Weston Urban is finishing the 300 Main mixed use 32-story residential complex, at a cost of about $107-million. Then, it is also working on the Continental Block Development, where it plans to renovate three historic structures and build a 16-story residential building on a 1.9- acre city block. Nearby, UTSA is continuing its downtown campus expansion with its acre city block. Nearby, UTSA is continuing its downtown campus expansion with its second education building, 180,000 SF, $124-million San Pedro Plaza II. And they bought One Riverwalk Place, an 18-story office building on N. St. Mary’s at Convent from USAA.
Sutton Building Renovation
Over on the Eastside, Texas Research and Technology Foundation’s Velocity Texas is finishing its $100-million renovation of the Sutton Building on East Commerce, turning it into a biotechnology center that will collaborate with military medicine innovations.
Port San Antonio and Brooks CityBase
On to the southside where we see a great deal of industrial expansion. First, there is the Port San Antonio expanding with the construction of a new office tower which will include the corporate headquarters for the DeLorean Motor Company, The Port is home to more than 80 companies and in the past four years, the Port has expanded by 680,000 square feet of additional facilities. Over then to Brooks CityBase which has seen over $1.2-billion in new development in the past 22 years, with another $500-million currently under way, and employing over 6,500.
Toyota’s Tundra Manufacturing Facility
Further south we have Toyota continuing to expand its enormous campus with a new $531-million / half million square foot expansion to its Tundra manufacturing facility, which follows its 2019 $400-million expansion. A brand-new industrial equipment manufacturer is JCB starting work on in its 400-acre site with a $500m facility on Hwy 16, northwest of Toyota. They join Navistar truck’s $275-million manufacturing facility to the east of Toyota that opened in 2022.
Medical Facilities
We are also seeing new medical facilities built: Santa Rosa Hospital’s 164,000 SF addition to its campus in Westover Hills. Nearby is a three-story, 226,148-square-foot $600-million Veterans clinic built in 2019. Then, University Health is building a $450-millon hospital in Selma to serve the rapidly growing I-35 corridor.
Industrial Park
In Schertz, a 1.4-million square foot six building industrial park on IH-35 has been started.
San Antonio International Airport
However, the biggest and most important new project planned is the San Antonio International Airport’s undertaking of a massive $2.5-billion expansion, updating the outdated Terminal A, adding more terminal space and perhaps even lengthening the runways.
This seems like a really exhausting list, but it is only the highlights of what’s happening here.
My point is that, while we may seem in a bit of a dip in the short term, in the long run we are on a very, very good path, with billions of dollars of new construction flowing into our city.
Send comments to raub@investmentrealty.com