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Monday, February 4, 2008

New mixed-use project eyed for city's far North Side

San Antonio Business Journal - by Tricia Lynn Silva

A 520-acre tract of land could be the next big thing in one of the hottest spots for development in San Antonio.

The land, which is owned by California-based investment firm Capital Foresight Ltd., is located along Loop 1604, just east of U.S. Highway 281, on the city's far North Side.

Collectively, the acreage known as Bulverde Oaks is now being sold off to potential buyers, according to J. Landon Kane of locally based real estate firm First American Commercial Property Group, which is marketing the land.

The property is broken up into smaller parcels ranging in size from two to 73 acres,

The individual parcels could accommodate a wide variety of uses -- from retail, to office, multifamily, hospitality and even some corporate-campus type of facilities.

The land stretches along the Loop 1604 corridor at Bulverde Road and east between Judson and O'Connor roads.

"We are extremely excited about this project because it will represent the next big area of expansion east from Highway 281 and along Loop 1604," Kane says. "There are no other available properties like this in the (far North) corridor -- as the Stone Oak area is now largely developed."

The tracts could be sold to a single buyer or multiple buyers, says Kane, who points out that there are several high-profile projects in proximity to Bulverde Oaks -- including Rolling Oaks Mall; Washington Mutual; the Northwoods shopping center; and Ridgewood Park, a new master-planned office park that is to be the new headquarters for Tesoro Corp.

Friday, February 15, 2008

Luxury apartments eyed for Austin Hwy. corridor

Houston firm Chancellor to develop 360-unit complex

San Antonio Business Journal - by Tricia Lynn Silva

The effort to breathe new life into an historic corridor in North Central San Antonio continues.

Houston-based Chancellor Property Management Co. Inc. has closed on the purchase of 7.34 acres along Austin Highway, where it plans to develop a high-end multifamily community.

The four-story development, which has yet to be named, will consist of 360 apartment units, according to Paul Buchanan, president of Chancellor Development -- the development arm of Chancellor Property.

Chancellor will own and develop the site under an entity known as Chancellor Austin Highway Apartments LP, says Roger C. Hill III, a broker with locally based Travis Commercial Real Estate Services Ltd.

LOCAL OFFICE MARKET CONTINUES TO SHOWS GAINS
San Antonio Business Journal - by Tricia Lynn Silva-Monday, April 23, 2007

Life is good for the local office sector. According to the first-quarter report compiled by the San Antonio office of Chicago-based Grubb & Ellis Co., the local office market absorbed 80,244 square feet of space over the first three months of 2007.

Absorption is a measure of the available space leased in the market on a net basis over a specific period of time.
By comparison, over the first three months of 2006, the local office market absorbed some 243,000 square feet, according to the most recent Grubb & Ellis report. Leading the way was the Class B category of office properties, which absorbed almost 68,000 square feet of space between January and March 2007, according to Grubb & Ellis. Activity in the Class A and C categories was considerably quieter -- with these properties posting positive absorption rates of 4,624 and 7,692 square feet, respectively.

While the absorption figure may not be as stellar this time around in comparison with first-quarter 2006, figures, other factors point to a real estate sector that continues to show improvement, according to the most recent Grubb & Ellis report. Overall rents, for example, now average roughly $19 per square foot -- up from $17.90 as of first-quarter 2006. Meanwhile, the citywide office vacancy was 12.1 percent as of March 31, 2007 -- down considerably from the 14.9 percent vacancy rate that was being posted in the local office market during the same period just a year ago.
The Grubb & Ellis report is based on data from single- and multitenant buildings that are 20,000 square feet or greater; vacancy figures include both direct and sublease space.

Even as demand increases for local office space, the San Antonio market could still face some challenges, the report says. As vacancy rates continue to fall, this real estate sector will become, as Grubb & Ellis puts it, "increasingly landlord friendly." In other words, incoming tenants will have a harder time finding space that is both well-located and value-priced.

New projects will help ease the dilemma of finding space -- although at higher rents than what might be found on an existing project, Grubb & Ellis notes. To date, there is over 950,000 square feet of new office space under construction -- most of it in the North Central submarket of San Antonio. Even with this slate of new projects, however, the local office market might find itself hard pressed to meet space demands, Grubb & Ellis concludes.

SAN ANTONIO'S OFFICE SPACE KEEPS GROWING
Web Posted: 04/19/2007 08:28 PM CDT
Rachel Stone Express-News Business Writer

Demand for San Antonio office space is still growing, but not at the break-neck rate of the past three years.
Demand continued growing in the first three months of 2007 — the market's 14th consecutive quarter of increased demand — but the growth rate has slowed compared to last year's record growth

The market absorbed 22,379 square feet of office space in the first quarter, compared with a quarterly average of 138,000 square feet for the past three years, according to San Antonio-based NAI REOC Partners, which tracks the city's commercial real estate markets.

The office market had one of its best years on record in 2006, absorbing more than 800,000 square feet.
Absorption is a demand indicator that measures the change in occupied space over time.
Brian D. Harris, NAI REOC's senior vice president, downplayed the shift. He said several new leases had been signed for buildings that aren't open yet, and so they weren't reflected in the first quarter numbers.
"I think we'll be on track for an equally strong '07 as we saw in '06," he said.

More than 500,000 square feet of new office space is expected to come online this year, according to the report. Last year, more than 730,000 square feet of new office space came into the market.
Several big office buildings are expected to open soon. La Arcata, which comprises 97,490 square feet in the Stone Oak area, is 55 percent pre-leased, and the first tenants are moving in this weekend, Harris said.
R.L. Worth & Associates leased out an entire 84,000-square-foot building — Heritage Oaks at Inwood I, which is under construction near Loop 1604 and Bitters Road — to one tenant, NuStar Energy.

Union Square II, a 131,000-square-foot, six-story office building under construction near Loop 410 and U.S. 281, is expected to open in late May or early June. It's already about 80 percent pre-leased, said Chuck King, a broker with Travis Commercial Real Estate Services Ltd. "Considering the amount of inventory that's been delivered to the marketplace in '06 and to date in '07 — most of it has had significant pre-leasing activity and that's a big sign of strength," King said.

Almost 150,000 square feet of new office space has come into the market so far this year. The citywide vacancy rate of 14.4 percent in the first quarter was down from 15.8 percent in the first three months of 2006, and average rents increased 34 cents from the end of last year to $18.89 per square foot. San Antonio has almost 24 million square feet of office space now, compared with 23.1 million at this time last year.

DOWNTOWN OFFICE LEASING MARKET NOT EXPECTED TO GROW IN 2007
San Antonio Business Journal-Tuesday, January 2, 2007

San Antonio's Class A office market rental rates in the Central Business District are likely to stay flat or recede slightly in 2007. That's according to Chicago real estate firm Grubb & Ellis Co.'s (NYSE: GBE) 2007 Global Real Estate Forecast, which was released Tuesday. If interest rates continue to be stable, construction costs remain in check and the economy continues to grow as expected, the real estate investment market should remain healthy across the United States. "We expect the economy to find a middle ground between an outright recession and inflationary growth -- the elusive soft landing -- thereby striking a balance between the commercial real estate leasing and investment markets," says Robert Bach, senior vice president of research and client services for Grubb & Ellis.

Businesses nationwide are expected to use their record profits to add staff and lease more space in 2007, the report says. About 25 percent of the expected 100,000 new payroll jobs that will be added per month in 2007 will be located in office buildings.
Grubb & Ellis reports that the 2006 office vacancy rate ended the year at 13.6 percent. By the end of 2007, however, the national office vacancy rate is projected to stand at 13.2 percent.
San Francisco; Seattle; Miami; San Jose, Calif.; and Midtown Manhattan are expected to post double-digit rental rate increases in 2007. Twenty downtown office markets will see Class A rates rise by 5 percent or more in 2007.
However, Class A rates will remain flat in a number of markets, including Cincinnati; Omaha, Neb.; Atlanta; Pittsburgh; San Antonio; Detroit and Wilmington, Del.

LEASING VS BUYING

Should my business lease space or purchase our own building? This is not an easy choice as there is no simple answer. The truth is there are advantages and disadvantages to both and a number of factors must be weighed while making this decision. Listed below are the primary factors that should be taken into account while making this important decision.

OFFICE ALTERNATIVES

Executive suites

Executive Suites provide flexible, professional space that is ready for you to “plug in and go”. When you choose an executive suite, there is no need to wait for office build-out or IT installation, and there is no capital investment. Your executive suite is fully operational and allows you to immediately get back to business. You pay one monthly fee, and the executive suite takes care of the rest. Typical executive suite services include:

• Flexible lease terms for individual or multiple offices

• Administrative and office management services

• Meeting space and conference rooms

• Internet access, mail service, furniture and phones

• Corporate Identity programs available (virtual offices)

• No capital investment!

Virtual Office Space

A virtual office is a service that is offered through serviced offices which allows clients to use a prestigious office address and professional reception service, without renting a physical office. This provides a cost effective alternative for small business owners that work at home or for traveling business people. Virtual offices provide professional and reliable handling and routing of customers, phone calls, and mail for the client--in essence, ensuring the client's virtual presence.

Virtual office clients usually have preferred access to the amenities of the serviced offices, such as fax machines, photocopiers, and meeting rooms, whenever the client visits the serviced office. Virtual offices are offered by most serviced office providers.

A virtual office may also denote a computer network system that allows users to login in from any location (e.g. an airport) and access their e-mail, documents, and other stored files. In this sense, the 'office' is the place where the person logs into the computer network.

Bigger Tenant Needs

Meeting the requirements of the bigger tenant necessitates a thorough understanding of the market and the players, and special analytical and research skills and services - all of which will affect your bottom line.

The key to successful Tenant Representation is knowledge - knowledge about the client's business plan, operational issues, funding, employee base, and more. We combine our dedication to each client's interests with our thorough understanding of your market area and our knowledge of the economy and current real estate trends. Then we go to work.

After understanding our clients' objectives and issues, we sort through the preliminary options, and begin a detailed evaluation using both objective and subjective criteria. We look beyond the rental rates, terms and conditions and pull each possibility apart before presenting it to our clients. Our representatives are an integral part of this process, lending critical perspectives to the evaluations of facility and construction issues with lease negotiation. The end result is a selection of meaningful choices for our clients that can help them meet their short and long-term goals.

Looking for Office Space?

Looking to lease, rent or buy office space? Our tenant representatives are here to help you! Our commitment is to find the right space, negotiate the best deal and help you avoid serious mistakes; we concentrate our attention on properly analyzing and negotiating on your behalf. We are here to help you with no cost or obligation!

The Buying Cycle

You'll have lots to consider as you shop around for the perfect location for your business. The last thing you'll want to do is to leave out some important consideration or miss a critical deadline. As you search for space, go down this checklist to make sure you're not forgetting anything.

• Timeline. Allow ample time for employees to pack away vital records and office equipment. The last thing you want is for a bunch of people tossing everything into boxes as the movers are coming through the front door!

• Location. No matter where you are moving, a new location means a “fresh start,” and you can inspire your employees and improve morale by involving them in the design and moving process.

• Features. Find out what your employees need, and design the workspace right the first time.

• Layout design. If you are making drastic changes, make sure you allow your employees to have some input.

• Office furniture. Evaluate your needs based on work flow and the number of employees who will be using the furniture.

• Amenities. Plan for the amenities that are important to your employees, and don’t forget to plan for adequate restroom facilities.

• Cooling and heating systems. Careful planning in this department will keep you from having sticker shock when the utility bills for air conditioning and heat arrive in the mail.

FINANCING OPTIONS

Commercial financing Pointers

Once you have made the decision to purchase a building space, it is a good idea to determine how you will be paying for the property before getting too involved in the process. There are numerous sources and means to fund the purchase. Some of the more popular methods are listed below:

SBA 504 Loan
Provides long-term, fixed-rate financing to small businesses to acquire real estate or machinery or equipment for expansion or modernization. Typically a 504 project includes a loan secured from a private-sector lender with a senior lien, a loan secured from a CDC (funded by a 100 percent SBA-guaranteed debenture) with a junior lien covering up to 40 percent of the total cost, and a contribution of at least 10 percent equity from the borrower. The maximum SBA debenture generally is $1 million (and up to $1.3 million in some cases).
See web site here, SBA 504 Loan

Adjustable Commercial Mortgage
A commercial loan in which the interest rate is adjusted periodically to a specific index such as Prime or T-Bills.

Construction Loan and Take-out
A commercial construction loan tied in with a pre-arranged takeout loan in place.

Fixed Rate Commercial Mortgage
An interest rate that remains constant throughout the term or the commercial mortgage.

Hard Money Loan
Commercial loans from private lenders based primarily on the property value.

Bridge Loan
A short term, interim or project type commercial loan. Usually 2 years or less.

Joint Venture
A financial partner who has a financial interest in the development or ownership of the property.

Sale-Leaseback
Lender purchases land and leases back to borrower for a fixed rent plus other considerations. This type of commercial mortgage can produce more dollars than a typical commercial mortgage depending on strength of the borrower.

Second Mortgage
A commercial loan secured by equity, but behind that of the first lien.

Wraparound Mortgage
Lender makes a second mortgage and assumes the first mortgage.