As San Antonio Office Market Rebounds, Transwestern Takes Over at 2MSF Mixed-Use
- Sep 16, 2009
By: Tonie Auer, Contributing Editor
With San Antonio’s office market rebounding in the third quarter, Transwestern’s local office hopes to take advantage of that good karma with the contract to handle the real estate services assignment for the Brooks City-Base development there.
Owned by the Brooks Development Authority, Brooks City-Base is a collection of approximately 2 million square feet of office, medical and technical laboratory, light industrial, retail and recreational properties set on over 1,300 acres. Brooks City-Base in San Antonio is a master-planned research and technology center resulting from a unique partnership between the United States Air Force and the city of San Antonio. The Brooks Development Authority, as owner, operator and developer of Brooks City-Base, is moving forward quickly with the redevelopment of the former Brooks Air Force Base.
Brooks City-Base is made up of approximately 1,250 acres, with more than 300 acres available for immediate development. More than two million square feet of laboratory and office space, light industrial facilities and recreation/fitness areas already exists onsite with some space currently available for leasing. There are currently over $170 million in projects being planned and constructed at Brooks City-Base.
The scope of Transwestern’s work will include leasing of existing commercial space, land leases and sales, as well as seeking developers for build-to-suit and development opportunities.
For San Antonio, good things are going on, according to the Grubb & Ellis Office Trends Report for the third quarter. The San Antonio office leasing market rebounded this quarter with 156,118 square feet of positive absorption. This influx of leased space was a culmination of the relocation and expansion of several businesses and numerous entities associated with Base Realignment and Closure (BRAC) at Fort Sam Houston, Grubb & Ellis reported.
Any quarterly occupancy losses seen across the market were countered by the occupancy of large tenants such as Medtronic moving into 145,000 square feet at the Overlook at the Rim and a government contractor leasing over 50,000 square feet in Bank of America Plaza, the report stated.
The positive net absorption is a much welcomed sight following the 320,000 square feet that was previously vacated by AT&T in their move to Dallas earlier this year. During the summer, Tesoro officially moved into their newly built 618,000-square-foot headquarters which left more than 100,000 square feet vacant in the competitive leasing market. Tesoro’s relocation to the owner-built Ridgewood Park would have caused further waves in the marketplace without the recent relocation by Whataburger, the report stated. Fortunately, Whataburger purchased 200 Concord – which was previously the home of Tesoro – in their headquarters relocation from Corpus Christi.
According to the report, despite all the positive quarterly activity, the San Antonio office leasing market has not climbed out of the trough yet. Looking forward, there is only one significant remaining lease in place by Concorde Career College which will occupy 39,855-square feet at Corporate Square Garden by year-end. Since deals of this magnitude are few and far between and there is still 280,115 square feet of negative absorption for the year, San Antonio is expected to close out 2009 with its largest annual occupancy loss since 2002.