San Antonio Commercial Real Estate Market Overview 08.16.11

8/4/2019 San Antonio Commercial Real Estate Market Overview 08.16.11

1/35

1

San Antonio Commercial Real EstateMarket Overview

Ernest L. Brown IV, CCIM

EVP, Managing Director

Central TexasGrubb & Ellis Company


2/35

Location in Texas and within the US

2


3/35

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


4/35

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.



5/35

-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


6/35

San Antonio Office MarketJob Sector Employment Growth


Employment data is as of December 2010

Percentage Change from Prior Year


7/35

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


8/35

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


9/35

San Antonio Fortune 500 Companies

9


10/35

Other Major Regional Employers

10


11/35

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).

11
http://r20.rs6.net/tn.jsp?llr=juljbmbab&et=1105311475084&s=11735&e=001epJgKFvP__pb4qjcRU_L9_5Vv9c786aJLX2RA6z8u4bs_ExHtNWWZrmGYRKbiNp5fs4Ay1tpG3rgRoaPnAB9W1IQ8pYjNE7xt2IjuxDQMsA=http://r20.rs6.net/tn.jsp?llr=juljbmbab&et=1105311475084&s=11735&e=001epJgKFvP__qH6TRhyME4iAX9oIGT573_40RE_ltgOLTt5uKP6XDuldPN8SXJRaFBlSIMw25JuOcFTWWj5WDTR244BGnBNfyZn_yrgLuwyYM8wipDqPLw2uFdrJXALTuf8O3PnR4EP5Bb3FJDLz7l7-qsqjfOUV_HHWCHljyS6r7Cxkbpsod3y92N96Y8eNXbG33yy7FZhwOjBx1DFQxHvA==http://naireocpartnersblog.com/?p=1353http://www.tamusa.tamus.edu/http://www.brookscity-base.com/http://naireocpartnersblog.com/?p=1105http://www.vmc.com/default.aspxhttp://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=3300+Sidney+Brooks+Road+San+ANtonio+TX&sll=29.341668,-98.435225&sspn=0.024279,0.038409&ie=UTF8&hq=&hnear=Sidney+Brooks,+San+Antonio,+Bexar,+Texas&ll=29.346008,-98.444581&spn=0.024278,0.038409&z=15http://www.brookscity-base.com/http://www.brookscity-base.com/http://www.brookscity-base.com/http://www.brookscity-base.com/http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=3300+Sidney+Brooks+Road+San+ANtonio+TX&sll=29.341668,-98.435225&sspn=0.024279,0.038409&ie=UTF8&hq=&hnear=Sidney+Brooks,+San+Antonio,+Bexar,+Texas&ll=29.346008,-98.444581&spn=0.024278,0.038409&z=15http://www.vmc.com/default.aspxhttp://naireocpartnersblog.com/?p=1105http://naireocpartnersblog.com/?p=1105http://naireocpartnersblog.com/?p=1105http://www.brookscity-base.com/http://www.brookscity-base.com/http://www.brookscity-base.com/http://www.tamusa.tamus.edu/http://naireocpartnersblog.com/?p=1353http://r20.rs6.net/tn.jsp?llr=juljbmbab&et=1105311475084&s=11735&e=001epJgKFvP__qH6TRhyME4iAX9oIGT573_40RE_ltgOLTt5uKP6XDuldPN8SXJRaFBlSIMw25JuOcFTWWj5WDTR244BGnBNfyZn_yrgLuwyYM8wipDqPLw2uFdrJXALTuf8O3PnR4EP5Bb3FJDLz7l7-qsqjfOUV_HHWCHljyS6r7Cxkbpsod3y92N96Y8eNXbG33yy7FZhwOjBx1DFQxHvA==http://r20.rs6.net/tn.jsp?llr=juljbmbab&et=1105311475084&s=11735&e=001epJgKFvP__pb4qjcRU_L9_5Vv9c786aJLX2RA6z8u4bs_ExHtNWWZrmGYRKbiNp5fs4Ay1tpG3rgRoaPnAB9W1IQ8pYjNE7xt2IjuxDQMsA=


12/35


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)

12


13/35


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


14/35

Eagle Ford Shale Play


15/35

Eagle Ford Leaseholders/Stake in Formation


16/35

San Antonio Office Market


17/35

San Antonio Office Submarkets


18/35

18

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


19/35

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


20/35

San Antonio Industrial Market
http://en.wikipedia.org/wiki/Image:UP_9214_19910510_CA_Cajon.jpg


21/35

Population Growth


22/35

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


23/35

San Antonio Industrial Submarkets


24/35

24

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


25/35

San Antonio Retail Market


26/35

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


27/35

Supply vs. Demand

San Antonio Retail Market Trends

Source: REIS, Grubb & Ellis

C i l RE I t t V l


28/35

28Source: Real Capital Analytics, Grubb & Ellis

Commercial RE Investment VolumeUp 100% in 2010, 75% in 2011

Billions


29/35

29

Source: MIT Center for Real Estate, RCA, Grubb & Ellis

Property Pricing


30/35

Source: Property & Portfolio Research, Grubb & Ellis

CRE Loans Maturing by Year

C t l T Hi h Ed ti I tit ti


31/35

Central Texas Higher Education Institutions

31


32/35

Central Texas Higher Education Institution Locations

32


33/35

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

33

Recent San Antonio


34/35

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


35/35

San Antonio Market Overview

Thank you for your time!

San Antonio Commercial Real Estate Market Overview 08.16.11

Documents

Transcript of San Antonio Commercial Real Estate Market Overview 08.16.11