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8/4/2019 San Antonio Commercial Real Estate Market Overview 08.16.11
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San Antonio Commercial Real EstateMarket Overview
Ernest L. Brown IV, CCIM
EVP, Managing Director
Central TexasGrubb & Ellis Company
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Location in Texas and within the US
2
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Population Growth
0
1
2
3
4
1.5
1.6
1.7
1.8
1.9
2.0
2.1
2.2
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
PercentCh
ange
Populat
ion
Source: U.S. Bureau of Labor Statistics
Healthy rate of population growth & in-migration
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Unemployment Rate
23
4
5
6
7
8
9
10
99 '00 '01 '02 '03 '04 '05 '06 '07 '08 09 10 11
Percent
San Antonios unemployment rate as of May 2011 was 7.3%,
decreased from 7.8% in January 2011 vs. the U.S. unemployment ratewhich stood at 9.1 as of May 2011.
Source: U.S. Bureau of Labor Statistics
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-30
-20
-10
0
10
20
30
40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 *2011
Thousa
nds
Source: U.S. Bureau of Labor Statistics, Economy.com
* Projections by Moodys Economy.com
20,400new jobsprojected
Annual Employment: San Antonio
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San Antonio Office MarketJob Sector Employment Growth
Source: U.S. Bureau of Labor Statistics
Employment data is as of December 2010
Percentage Change from Prior Year
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Costs of Doing Business
84
88
92
96
100
104
108
112
Dallas Austin Houston Fort Worth San
Antonio
Source: Moodys Economy.com
Far lower costs of doing business in San Antonio, a long-term driver
Cost of Doing Business, U.S. = 100, 2006
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San Antonio Economic Generators
Bioscience & Healthcare (South Texas Medical Center)
Military Services (Randolph AFB, Lackland AFB, Fort Sam Houston)
Tourism (rich in historical landmarks and entertainment attractions)
Financial Services (USAA, Citicorp, Frost National Bank, JPMorganChase, Wells Fargo)
Information/Technology (Microsoft, Rackspace)
Manufacturing (Toyota, Caterpillar)
International Trade (proximity to Mexico, NAFTA Corridor)
8
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San Antonio Fortune 500 Companies
9
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Other Major Regional Employers
10
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Recent Announcements
San Antonio Welcomes BD San Antonio city leaders celebrated the grand opening of BD (Becton, Dickinson and Company),
a leading global medical technology company, during a ribbon cutting ceremony at thecompany's new North American Professional Service Center in San Antonio on June 3. Thecompany adds to San Antonio's leading industry, healthcare and bioscience, which makes anannual economic impact of nearly $19 billion with more than 140,000 employees. BD is expectedto bring nearly 300 new jobs to the Alamo City when fully operational.
Texas A&M San Antonio to open second campus The Brooks Development Authority announced that Texas A&M University San Antonio has signed
a deal to lease more than 77,000 square feet of space at Brooks City-Base.
Brooks City-Base lands VMC and 600 new jobs
VMC Consulting, a Redmond, Washington-based technology consulting and outsourcingcompany, selected San Antonio for its new 600-seat Customer Care and Technical SupportCenter. The company leased 34,954 square feet in Building 532 (72,890 square feet) located at3300 Sidney Brooks Road at Brooks City-Base (formerly known as Brooks Air Force Base).
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Recent Announcements
CPS announced five new partners, who will be opening or moving operations toSan Antonio:
Consert Communicationssoftware for intelligent lighting
(Expected to reach 150 professional and technical jobs by 2014)
Greenstar LED light manufacturer
(Initially will employ 38)
Coldcar manufacturer of all electric delivery trucks
(Initially will employ 38, 60-100K SF facility built on 12-15 acres)
Summitt Texas Clean Energygoing to be building the worlds cleanest fossil fuel burningpower plant (something like 25% of the total emissions) (Will open a customer relationsoffice by 2012)
Sun Edison 30 megawatt solar power farm to be
(60-90 construction jobs per 10 megawatt facility)
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Recent Announcements
Oil-field Service Companies establishing bases to serve clients drilling inthe Eagle Ford Shale in South Texas.
Halliburton purchased 150 acres and is hiring 100 people
Weatherford will also hire 100 people for Bexar County location
13
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Eagle Ford Shale Play
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Eagle Ford Leaseholders/Stake in Formation
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San Antonio Office Market
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San Antonio Office Submarkets
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San Antonio Office Statistics
Source: Grubb & Ellis
Second Quarter- 2011
Class Total SF Vacant SF Vacant %
2Q11
Net
Absorption
Average
Asking Rent
A 10,598,786 1,819,288 17.2% 76,152 $26.28
B 11,972,080 2,368,388 19.8% (52,278) $18.79
C 3,288,597 399,495 12.1% 26,457 $16.52
Total 25,859,463 4,587,171 17.7% 52,530 $21.20
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Net Absorption vs. Vacancy Rate
-800
-600
-400
-200
0200
400
600
800
1,000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
*201
1
In
Thous
ands
5%
7%
9%
11%
13%15%
17%
19%
21%
23%
Net Absorption Vacancy Rate
San Antonio Office Market Trends
Source: Grubb & Ellis * Year-to-date
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San Antonio Industrial Market
http://en.wikipedia.org/wiki/Image:UP_9214_19910510_CA_Cajon.jpg8/4/2019 San Antonio Commercial Real Estate Market Overview 08.16.11
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Population Growth
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More than 50% of all goodsflowing between the United
States and Mexico travel
through San Antonio
Centrally located
approximately 1,400 milesfrom Los Angeles, Baltimore,
Philadelphia and Detroit
Distance to Monterrey, Nuevo
Leon is 300 miles and 900
miles to Mexico City
San Antonio has direct access
to the ports of Long Beach,
Houston, and Corpus Christi
Region: Strategic Location
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San Antonio Industrial Submarkets
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San Antonio Industrial Statistics
Source: Grubb & Ellis
Second Quarter- 2011
Type Total SF Vacant SF Vacant %
2Q11
Net
Absorption
Average
Asking Rent
General
Industrial
18,816,505 1,827,062 9.7% 60,787 $4.35
R&D/Flex 10,271,319 1,134,330 11.0% 38,106 $8.38
WH/Dist. 38,966,105 3,851,966 9.9% 362,937 $4.19
Total 68,053,929 6,813,358 10.0% 461,830 $4.97
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San Antonio Retail Market
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San Antonio Retail Inventory
General Retail,
43.4%
Shopping
Center, 35.8%
Specialty
Center,
0.2%
Mall,11.5%
Power
Center, 9.0%
San Antonio Retail
General Retail
Shopping Center
Specialty Center
Mall
Power Center
26
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Supply vs. Demand
San Antonio Retail Market Trends
Source: REIS, Grubb & Ellis
C i l RE I t t V l
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28Source: Real Capital Analytics, Grubb & Ellis
Commercial RE Investment VolumeUp 100% in 2010, 75% in 2011
Billions
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29
Source: MIT Center for Real Estate, RCA, Grubb & Ellis
Property Pricing
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Source: Property & Portfolio Research, Grubb & Ellis
CRE Loans Maturing by Year
C t l T Hi h Ed ti I tit ti
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Central Texas Higher Education Institutions
31
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Central Texas Higher Education Institution Locations
32
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Top 10 Central Texas Higher Education Institutions(By Enrollment)
Institution Enrollment
1. Austin Community College 44,100
2. Central Texas College 24,133
3. Northwest Vista College 14,584
4. Palo Alto College 8,047
5. San Antonio College 21,5896. St. Phillips College 10,731
7. Texas State University 32,586
8. University of Texas Austin 51,233
9. University of the Incarnate Word 7,708
10. University of Texas San Antonio 30,395
Total Enrollment of all 61 Institutions: 298,314
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Recent San Antonio
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The San Antonio economy recently ranked 11th in the U.S. according to a Brookings Institution study todetermine the level of cities recovery from the recession.
San Antonio recently ranked 2ndin Forbes list of Americas Fastest-Recovering Cities.
In 2010, the San Antonio-New Braunfels region ranked 2ndin Forbes list of Best Big Cities for Job Growth.
In 2010, the Alamo city was ranked among the top five cities on Forbes list of fastest growing cities in
America. San Antonios economy driven by sectors such as health care and insurance has benefitedgreatly from military expansions and relatively stable housing prices.
Forbes Magazine ranked San Antonio 16th on their recent list of best places for business and careers. Thelist was strongly dominated by Texas metro areas.
Forbes.com rated San Antonio 9th among the best cities for young adults.
Four Texas cities are among the top places in the nation for young professionals to live and work, accordingto a list released yesterday by Next Generation Consulting (NGC). On NGCs Next Cities list, San Antonio
landed 17th.
Milken Institute ranked the San Antonio MSA as 14thin their list of 2010 Best-Performing Cities.Forbes Magazine recently ranked San Antonio number 6 on their list of 10 Cities Where Americans Are
Relocating.
Metro Monitor ranked San Antonio among its list of Top 20 Strongest-Performing Metro Areas in 2010.
In 2010, Brookings Institute ranked San Antonio among its list of The Top 21 Recession-Proof Cities.
Recent San AntonioAccolades
S A t i M k t O i
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San Antonio Market Overview
Thank you for your time!