Category: News & Market Reports

San Antonio Office Market Remains Steady Despite Ongoing Pandemic Conditions

Posted on by Sarah

While other major cities across the country have witnessed dramatic upticks in office vacancy due to the pandemic and changing nature of the workplace, the office market in San Antonio has remained relatively steady throughout the last couple of years. The market has performed well enough in the last quarter, that San Antonio was listed as one of the top 10 office markets in the country by the National Association of REALTORS.

The most recent office vacancy figure for San Antonio sits just below 11%, according to a Q3 report from NAI Partners. While not exactly the strongest number, the one thing that San Antonio can boast is consistency. Over the last ten years, the San Antonio office market has ebbed and flowed between 9% and 12% total office vacancy. The highest vacancy level was in 2012, during the Great Recession, while the low was in 2018 as the country’s real estate market was booming.

Essentially, San Antonio hasn’t had to face the challenge of having a major glut of vacant office space like other major cities have.

A positive sign is the fact that San Antonio’s vacancy has decreased in last quarter, inching just below the 11% threshold. According to the NAI Partners report, leasing volume increased by 45% quarter-over-quarter with 700,000 square feet of office claimed during that period. Net absorption in the third quarter was around 8%, or roughly 390,000 square feet. Another 203,000 square feet of new office product was delivered in Q3 2021.

The NAI Partners report credits San Antonio’s stability to the quick economy recovery across Texas. While many other major metros witnessed ongoing stay-at-home orders and business shutdowns, Texas reopened quickly, giving its economy a head start on recovery. The National Association of REALTORS points to San Antonio’s close proximity to the booming (and expensive) Austin market.

But there could be much more growth in San Antonio in the coming years as Austin becomes too crowded and prohibitively expensive. NAI Partners highlights Tesla’s move from Palo Alto, California to Austin as a major boost to the regional economy and expansion of the Texas auto industry. Toyota and Navistar currently have a presence in San Antonio and the city is well-positioned to more investment in manufacturing and corporate offices in the near future.

WeWork Stock Starts Trading, Two Years After an Aborted I.P.O.

Posted on by Sarah

Two years after WeWork’s attempt to become a public company flamed out spectacularly, the co-working giant started trading on the stock market on Thursday, hoping that investors will now believe in its prospects.

The earlier effort collided with concerns about WeWork’s breakneck growth, its huge losses and the alarming management style of its co-founder Adam Neumann. WeWork has new leaders who have pared back its expenses and hope to exploit an office space market that has been upended by the pandemic. But the company still has lofty growth targets, big losses and many empty desks in its 762 locations around the world. And WeWork made it through the last two years only because of huge financial support from SoftBank, the Japanese conglomerate that is WeWork’s largest shareholder.

“We got here on a different road than we anticipated, but we’re here,” Marcelo Claure, WeWork’s executive chairman and a senior SoftBank executive, said in an interview Thursday with CNBC.

Instead of an initial public offering, WeWork entered the public markets by merging with a special-purpose acquisition company, or SPAC, something of a craze these days. It is expected to raise as much as $1.3 billion from the deal, a sum that includes stakes held by the investment firms BlackRock and Fidelity. At Thursday’s stock price, WeWork was worth about $9.5 billion, a fraction of the $47 billion valuation placed on the company before investors soured on it in 2019. Click to read more at www.nytimes.com.

Return-To-Office Rebounding After Delta Variant Slowdown

Posted on by Sarah

Nearly 50 million workers switched last year from an office environment to work-from-home (WFH), allowing large parts of the U.S. economy to continue functioning despite social distancing requirements during the pandemic. As other sectors began to recover from the shutdowns last year, however, large numbers of workers remained at home, causing some concerns about possible longer-term impacts of WFH on the markets for office commercial real estate. Despite some twists and turns due to the Delta variant, the most recent news suggests the return-to-office (RTO) is rebounding.

The RTO began as the economy started to reopen, and proceeded through much of last year. 16 million workers had returned to the office by October 2020, a one-third decline in WFH in six months. Being back in the office has always been contingent on progress in bringing the pandemic under control, however, and the surge in COVID cases late last year brought about a partial reversal in RTO in November and December.

Fortunately, RTO regained momentum earlier this year as tens of millions of Americans received vaccinations against the coronavirus. By July 2021, the number of people working from home had declined nearly 60% from its peak in May 2020. (I discussed the progress in RTO in an earlier Forbes article in July 2021) Click to read more at www.forbes.com.

From the Ground Up: Levey Group Rises to Challenge of Unprecedented Industrial Market

Posted on by Sarah

Powered by an entrepreneurial spirit, Houston’s Levey Group is seizing the moment for which it has prepared for nearly 40 years.

When real estate visionary Gustave Levey, affectionately known as Gus, founded the company in 1982, he had no way of predicting the ebbs and flows of the industrial market building up to what it is today.

“He was one of the pioneers of the industrial real estate development business in Houston, having begun building to-suit, single-tenant manufacturing facilities for lease,” says David Ebro, Levey Group president and Gus’s grandson. “Manufacturing companies often had no leasing options because the institutional developers focused almost exclusively on warehouse and distribution space.”

The Levey Group has never been afraid to bet on a dark horse. As the company evolved, so too did its projects. Appreciating flexibility and avoiding formulaic thinking, its team often recognizes values others overlook.

“Over the years we have developed buildings for sale, and built-to-suit for
lease both, on a stand-alone basis, and within our business parks. We have also redeveloped functionally obsolete buildings, and made collateral-backed opportunistic loans,” says Ebro. “We have carried this entrepreneurial philosophy into our land development business by acquiring parcels that are often overlooked because of some functional challenge, be it a lack of utilities, floodplain issues, pipeline crossings, etc.” Click to read more at www.rednews.com.

Cambridge Holdings To Develop Healthcare, Health & Wellness District At Frisco Station

Posted on by Sarah

FRISCO, Texas (October 7, 2021) – Dallas-based Cambridge Holdings Incorporated, a national healthcare, commercial office and mixed-use real estate firm, has entered into an exclusive agreement with the Frisco Station Partnership to develop healthcare and health and wellness-related projects within Frisco Station, a 242-acre mixed-use development in Frisco. This agreement will commence the Health and Wellness District at Frisco Station, situated in the northwest quadrant of the Dallas North Tollway and Warren Parkway, adjacent to the Dallas Cowboys’ world headquarters, The Star, and The Ford Center.

“With Cambridge joining our team, we are reaching the full potential of Frisco Station as a globally recognized Smart, Creative, and Healthy mixed-use neighborhood,” said Trey Sibley, general manager of The Rudman Partnership. “As a well-known powerhouse, Cambridge brings the most innovative approaches to health and wellness-related development. We couldn’t be more pleased to have them join us as we execute what’s considered to be the crown jewel of the project – the place where residents and visitors can experience ways to live healthier, more active and longer lives.”

A result of a prominent partnership between Rudman, Hillwood and VanTrust Real Estate, Frisco Station Partners has delivered 650,000 square feet of office space, 955 units of multifamily housing, 450 hotel rooms and six acres of a programmed park system since launching the project in 2015. As one of the first communities in the nation built from the ground up with AT&T’s 5G platform, Frisco Station has leveraged this connectivity throughout the development to create one of the most robust mixed-use projects in North Texas. Click to read more at www.wolfmediausa.com.

How Gensler Architect Steven Upchurch Will Approach Dallas’ Landmark Gold Campbell Centre Towers

Posted on by Sarah

Gensler architect Steven Upchurch drives past Campbell Centre every day on his way to and from work. Despite being called the “fugliest” building by the Dallas Observer, the twin gold towers—flush with history—still manage to spark interest for the esteemed designer.

Located at the intersection of North Central Expressway and Northwest Highway, the first tower at Campbell Centre was built in 1972 using glass with a microscopic coating of real gold. The second building was added in 1977.

Cementing a place in American television, the buildings were portrayed as the office of Cliff Barnes—the nemesis of J.R. Ewing on the popular television show Dallas from 1982 to 1988.

But, as the investors who purchased the building (Fenway Capital Advisors and Waterfall Asset Management) put it, the building has lost some of its luster over the years.

Patrick Tribolet, managing partner of Fenway Capital, had been eyeing Campell Centre since pre-COVID and, about a year into the pandemic, purchased the 20-story towers. It is said the property sold for about $105 million, or about $120 per square foot. At the time (in April), it was the second-largest office acquisition in 2021 to take place in North Texas. Click to read more at www.dmagazine.com.