San Antonio and the metro area are experiencing a strong surge in the local commercial real estate market, according to figures released by Integra Realty Resources.
Â Martyn Glen, Senior Managing Director of the San Antonio office of IRR, says despite a nationwide downtown in commercial real estate, the figures show continued strength in San Antonio, with much of that strength spreading to exurban cities from Boerne to Pleasanton which previously have been considered to be 'too small' to attract significant institutional investment capital.
Â Glen says the city's economy is humming, and commercial investors go where the customers' pockets are full.
Â "We have a low unemployment rate, lower than the state, and people here have good ideas of education, as is shown by the large number of very high quality colleges in this area," he said.
Â The biggest sector in the metro right now is multi family housing.
Â "The condominium market has had a checkered career in the city," he said.Â .Â "The market in Class A and Class B condominiums is turning around.Â Unfortunately the recession of 2008 turned that around and it is just getting back on its feet.Â The apartment market is growing rapidly, both in the suburbs and downtown, is going strong."
Â He said the move toward living downtown has been a big boost for apartments.
Â "Mayor Castro's idea of 7500 units in the downtown by 2020, they are growing rapidly."
Â He says local apartments are getting smaller, because of increased prices.Â He says it is important that apartments be no more than 30% to 35% of a renter's income to succeed.Â He says downtown apartments are reaching rents of $2 per square foot.
Â Glen said converting of historic buildings into apartments, and the new construction along the 'museum reach' of Broadway north of downtown is also boosting the market.
Â One segment of the commercial real estate market which is expected to boom in the second half of the year is hotels.
Â Â He says the opening of the Tobin Center for the Performing Arts in September is expected to jump start hotel construction downtown.
Â Glen says the victory of the San Antonio Spurs in the NBA Finals in June, interestingly, has led to new interest in the city by international real estate investors.
Â "It has taken many years for international portfolio companies to get interested in San Antonio, but now they are."
Â He says international investors saw the diversity of the team and see a diverse city, and he says every investor likes to partner with a 'winner.'
Â And Glen says the local commercial real estate boom has a lot to do with the Eagle Ford Shale, especially leading to new construction in southeast San Antonio, at Brooks City Base, and in Pleasanton.
Â "It brought about $60 billion into the economy in 2013, it has increased population, and led to an increase in the work force," he said.