Walmart at Helotes Town Centre

Walmart’s newest San Antonio Supercenter opened this month at FM 78 and Foster Road on the city’s Northeast side.  The store accounts for approximately new 300 jobs and offers a significant boost to the revitalization efforts in the area.  The project calls for additional 30,000 square feet or so retail shop space to be constructed as demand dictates but construction is not expected to begin until some pre-leasing is achieved. 

Just a few weeks ago, doors opened for business at the new 153,000-square-foot Walmart Supercenter at Bandera Road and Leslie Road in Helotes.  The Supercenter anchors the Helotes Town Centre project.  Construction is now underway on an additional 27,000 square feet of retail shop space.   Joining the project, KFC and Taco Bell have purchased pad sites and Taco Bell is nearing completion.

In addition to several new Supercenters planned for the greater San Antonio area, the discount giant has also announced plans to open its first supermarket concept store here.

Click to read: Walmart prepares for grand opening of Foster Road store (San Antonio Business Journal, 4-29-13) and Walmart sets opening date for new Helotes store (San Antonio Business Journal, 4-8-13)

Commercial properties will see the biggest spike, with about a 12 percent rise in values. Residential properties will see an approximately 2 percent bump.  That means many property owners will pay more in taxes, which means local school districts and governments will collect more from ad valorem taxes.

Still, even though the real estate market is rebounding, a number of areas are still seeing foreclosures — a factor the appraisal district uses to set property values — while other communities go mostly unscathed.

The double-digit jump for the commercial market was an expected outcome as it continues its rebound. Apartment buildings are at the top of the sector with values increasing about 20 percent.

“There’s still a significant amount of challenge in the market, especially in some pockets,” said Kim Gatley, a vice president at commercial real estate firm NAI REOC San Antonio. “And definitely, property by property, there are issues that would mitigate the appraised increase. But overall, as the economy improves and leasing continues, the natural outcome is that it increases value.”

Across the county, there’s been a healthy wave of construction projects adding value to the tax rolls. For example, there were about 8,000 home starts last year, according to data from Metrostudy, a residential real estate research firm. That figure is expected to grow by about 11 percent in 2013 to more than 9,000 starts.

Click to read entire article: Bexar property values rise (San Antonio Express-News, 4-18-13).

Baptist Emergency Hospital – Schertz

Baptist Emergency Hospital opened a new facility in Schertz — the first fully licensed hospital within the city limits. The 24-hour facility is located at 16977 I-35 North at the Schertz Parkway intersection.

The facility spans nearly 40,000 square feet and features eight inpatient rooms, seven emergency exam rooms and one triage room. The Schertz facility is the fifth such facility that Baptist Health System has opened in San Antonio since late 2011.

Click to read entire article: Baptist opens emergency hospital in Schertz (San Antonio Express-News, 4-17-13)

Click to download a property information package for more information on available office space for lease in the building.

Montrose Market – Houston

Locally-based grocer H-E-B put an end to rumors spreading across the Stone Oak area, confirming its plans to open a one-of-a-kind store in Stone Oak at Hardy Oak and Wilderness Oak.

Area residents have speculated that the supermarket chain will open a smaller version of its upscale Central Market on Broadway, frequently called the “Gucci-B,” in their neighborhood. Officially, however, H-E-B has said only that it will open a unique store there, and that it will resemble two of its more expensive locations in Austin and Houston.

H-E-B’s decision follows a continuing population and housing boom in the northern part of the city.

Between 2000 and 2010, the number of owner-occupied housing units in five Stone Oak area ZIP codes soared by 179 percent — far ahead of Bexar County’s 23 percent growth rate during that same decade, according to the U.S. Census Bureau. The number of households grew by only 15 percent within San Antonio city limits.

Aside from housing growth, Stone Oak is known for its high property values, which is perhaps why early estimates of the new H-E-B store’s construction costs exceed $8 million.

Click to read entire article: Stone Oak getting a distinctive H-E-B (San Antonio Express-News, 4-16-13)

655 Richland Hills Dr.

Locally-based eyewear company HVHC Inc. is investing $25 million to open a second area manufacturing plant.  HVHC, headquartered downtown in the IBC Centre complex, reportedly signed a long-term lease in the Westpointe Business Park at 655 Richland Hills Drive (120,473 sf) near Highway 151 on the city’s Far West Side.  The building was previously occupied by Dahill Industries which recently moved operations to Fountainhead Tower along the I-10 corridor.  

Production at the new lab is expected to start in January of 2014.  The Richland Hills plant is expected to accommodate up to 600 new jobs and an estimated 150 jobs will be added to the existing 350 currently at that downtown headquarters office.

HVHC already operates a manufacturing plant in the Tri-County Business Park in Schertz that makes 2 million pairs of eyeglasses a year. The facility employs a similar number of workers that will be hired for the new plant.

Click to read entire article: HVHC plant just months away (San Antonio Express-News, 4-10-13)

Despite challenges – including gradually rising interest rates and government spending cuts – the outlook for commercial real estate is positive. The U.S. economy is expected to grow by 1.9% in 2013 and accelerate to 2.8% in 2014. This growth will spur the creation of 4.8 million jobs over the next two years. As job growth accelerates, so too will demand for commercial real estate, leading to continued improvement in vacancy rates.

“The key difference between the initial recovery in commercial real estate and future growth will be the contribution of interest rates,” says James Marple, TD Senior Economist and the author of the study. “As interest rates rise, the spread between commercial real estate yields and government Treasuries will narrow. Prospects for price growth will then depend on improving economic fundamentals.”

Click to read entire article: TD Economics: Housing market recovery will continue to lift commercial real estate (MarketWatch, The Wall Street Journal, PRNewswire via COMTEX, 4-9-13)

Regardless of the decline in cap rates for office and industrial properties, net lease retail properties remain priced at a 45 and 77 basis point premium over office and industrial properties respectively. Properties occupied by credit tenants with long term leases experienced the greatest compression in the first quarter of 2013.

Limited supply of properties, specifically new construction, continues to be a major theme throughout the net lease industry.

Despite the scarce property supply in the first quarter of 2013, the median asking versus closed cap rate spread for net leased retail and office properties rose.

The national single tenant net lease market should remain active throughout 2013 due to the stability and financing availability of this asset class.

A shrinking supply and a limited development pipeline will make newly constructed assets in the highest demand and command the lowest cap rates.

Click to read entire article: Net Lease Market Remains White Hot (National Real Estate Investor, 4-4-13)

Currently, about one-third of downtown office space is vacant — despite cheaper average rental rates compared to the rest of the city.  Of course, the Alamo City isn’t alone. Across the nation, cities are struggling to fill downtown offices as companies flee for the suburbs.

Click to read entire article: Downtown office market struggling (San Antonio Express-News, 4-7-13)

CHRISTUS Santa Rosa Westover Hills campus

The CHRISTUS Santa Rosa Hospital complex, located at 11212 State Highway 151 in Westover Hills on the city’s Far West Side, is growing.  Construction is underway on Medical Plaza III (70,000 sf) – the three-story, free-standing medical office building is the third on the Westover Hills campus. 

The decision by CHRISTUS to convert its former City Centre home to Children’s Hospital of San Antonio has prompted the relocation of CHRISTUS Santa Rosa Family Health Center which will occupy the third floor of the new building. 

Medical Plaza I is reportedly 100% and Medical Plaza II is currently 86% occupied.  In addition to the 50,000 square feet CHRISTUS is expected to occupy in Medical Plaza III, another small lease has been inked to move the building to 70% pre-leased.

Click to read the media release: CHRISTUS Santa Rosa Hospital – Westover Hills breaks ground on new medical office building (CHRISTUS, 3-28-13)

Today, the mostly rural area of the Eagle Ford—about fifty miles wide and four hundred miles long, running across roughly two dozen counties—is thick with truck traffic. Last year, the Railroad Commission issued more than 4,100 drilling permits for the shale, up from just 26 in 2008. Oil production in 2012 jumped to about 352,127 barrels a day, up from 127,965 barrels a day in 2011.

Real estate prices are soaring in places like Beeville, Karnes City, and Kenedy, and towns that once boasted two or three hotels now have twice as many, with more on the way. A new H-E-B opened in Gonzales last year, and a Walmart Supercenter is under construction; another H-E-B will open this month in Carrizo Springs.

Of course, all this growth also presents some challenges.  Click to read entire Texas Monthly article: The Bust of Times (Texas Monthly, April 2013)