TEXAS SNAPSHOT, AUGUST 2008

San Antonio

Crisci

At present, San Antonio is experiencing relatively aggressive growth. There are a number of planned developments for all areas of the city, and the current market is poised for growth. Worth noting is the proliferation of Hilton and Marriott branded hotels.

The River Walk is expanding, helping to broaden the general appeal of the San Antonio area as a tourist destination and a residential location. Additionally, there is quite a bit of medical development, including the Medical Center area. The military presence is stable and continues to steadily grow, and corporate growth in areas like technology remains high. The growth in these diverse and important areas illustrates the overall appeal of the San Antonio area to developers, and further solidifies the city’s diversified focus in sectors such as health care, military and tourism.

All submarkets in San Antonio are growing. If there’s one that is noticeably taking off more than others, it would be the north side of town. The northern part of the city is booming from the growth of the medical center. With the added stability and steady growth of the military in that area of town, north San Antonio has a great deal in place to secure continued growth.

New development is very diverse and hitting all segments of the market. There has been significant growth in all areas of the hotel sector, which serves as a great indicator of the immense opportunities that San Antonio offers. There is a diverse range of hotel properties being developed currently, everything from a 1,100-room Marriott all the way to an array of focused-service projects.

Keep an eye on the 1604 Loop, as well as the North and Northwest sectors, for the same reasons described above. The ground work for even more growth in these areas is in place, and we will continue to see growth in these important business sectors.

Inventory has gone up, but demand has kept pace. There has been significant growth in a number of hotels in the area, which may prove to eventually flatten out the market, but that the demand will keep the pace of development up and continue to keep hotel rates competitive.

There is a chance that occupancy may go flat, but rates should increase steadily into the future. Demand has gone up, and with the continued growth in other business sectors, it should help keep pace with the hotel growth currently taking place.

— Mark Crisci is executive vice president of investments and development for K Partners Hospitality Group.

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