Here is a little known fact: The industry with the largest number of jobs in San Antonio is real estate. One would think health care, due to our superior medical facilities, or hospitality, due to the fact that San Antonio is the number–one location in Texas for tourism. Real estate creates over 131,000 jobs in San Antonio today and is continuing to grow. But why is this? I will summarize the factors that separate our real estate market from the rest of country and how we can continue to support the market’s success.
Commercial Real Estate Try driving down any stretch of highway in San Antonio and look at how many projects you can spot under construction. These range from retail to office space, and now multi family units are well on their way to meet the demand we have here today. Many developers realized that due to residential growth, multinational companies relocating here, and more importantly, the fact that we have historically had very affordable land, San Antonio put itself on the map as the place to build. And build they have! Over 2,000,000 square feet of new speculative office space was delivered between 2000 and 2006. Since 2001 over 9,000,000 square feet of retail space has been was delivered. That figure does not include the “Big Box” tenants such as Wal–Mart, Home Depot, etc. San Antonio is not just a place to have conferences downtown and dinner on the River Walk, it’s also a major target market for some of the largest real estate developers in the world.
Residential Real Estate For those of you that are still depressed about the fact that house flipping is no longer a local past time, please keep a few things in mind:
- Even though the national housing market crisis and the sub–prime loan problems will decrease the number of new homes on the market, housing is currently doing better than 2004, which outside of the infamous 2006, hit market records.
- Developers are still seeing a huge demand for lots, especially for the higher price range of homes.
- All markets have to stabilize, whether it’s manufacturing or auto sales. You must reach a point that market rates do not continue to spike upward. It’s important to see the market level out to support actual demand. Remember, California investors kept looking up and up and leveraging themselves more and more, only to prepare themselves for one of the largest housing downturns the market has ever seen.
Can we support this Real Estate growth? As a banker, I must recognize the fact that real estate is very cyclical. There are many factors that are needed to continue to increase investment in Real Estate market, while still keeping values consistent.
- Population growth
- Housing areas that lack convenience such as shopping, gas stations and office space etc., creating opportunity
- Land availability
- Adequate utility infrastructure
- Areas that have revitalization capabilities such as the downtown area
- A growing business community
- Continued support of the arts, entertainment and leisure, making San Antonio a desirable place to live.
How Can We Help Our Real Estate Market Continue To Succeed? A successful, growing business community is the single most important factor to continued real estate success. The answer is not only economic stability, but workforce talent. We must be the city that entices graduating students to say, “I want to continue to live or move to San Antonio.” Local companies such as USAA, Valero and AT&T have superior work environments with great emphasis on the employee, but they must continue to draw the best employees in the country. Just as important, small businesses have the same struggles. By supporting small businesses we are helping to create a unique community, differentiating ourselves from other cities. No one can predict the future of the real estate market, but we can do everything in our power to make San Antonio one of the best places to live.
Our real estate economy is vital to our city and we are fortunate to be recognized as one of the fastest growing cities in the U.S. With the city’s continued support, real estate will continue to create many jobs and increase our quality of life. If we continue to create a promising business community, superior educational system and preserve our local environment, our opportunities are endless. This is only the tip of the iceberg for prosperity in San Antonio.
For financing of your next Real Estate project please contact: Michelle Snider, Vice President Capital One Bank, N.A., Commercial Real Estate Division michelle.allen@capitalonebank.com, (210)491–7862
