TEXAS SNAPSHOT, OCTOBER 2006

San Antonio Retail Market

The city of San Antonio, as a whole, is seeing steady, continued growth with the Northwest and North Central submarkets leading the way, according to Martyn Glen, managing director with Integra Realty Resources in San Antonio. “The retail expansion is being spurred by the explosive residential growth on the north and west sides,” Glen says.

 On the northwest side of town, The Rim, a major project located at the northeast corner of the Interstate 10 and Loop 1604 intersection, is coming on line in phases this year and into 2007. “Primarily retail, the development will be approximately 2 million square feet at build out,” Glen says. “It will also include office space, the Talavera hotel, and a 20-screen movie theatre with San Antonio’s second IMAX theater.” At the southeast corner of the same intersection, there is an additional 1 million square feet of retail in the works called Regal Hills. This power center will cover 100 acres out of a 400-acre tract of land; the remaining 300 acres will be mostly residential. “These two developments, along with the 1.3 million-square-foot Shops at La Cantera that came online in 2005, have created a massive retail district on a scale rarely heard of in San Antonio,” Glen says.

 At the southwest corner of U.S. Highway 90 and Loop 410 on the southwest side of the city, a 70-acre retail development named West Side Peak is in the early phases. The development is adjacent to Lackland Air Force Base and calls for 300,000 square feet of retail space.

 In San Antonio’s central business district (CBD), 30,000 square feet of street-level retail space will be a part of a new mixed-use development called The Vistana. Located at the northeast corner of North Santa Rosa and West Commerce, the 14-story site will take up an entire city block and will include 246 market-rate apartments and a parking garage.

 In addition, locally-based grocer HEB plans to roll out another of its latest store concept HEB Plus! in the Stone Oak area. Located at Evans Road and U.S. Highway 281, the 150,000-square-foot store will anchor the new 350,000-square-foot retail development, Stone Ridge. HEB Plus! offers one-stop shopping and expands on HEB’s core strengths in fresh foods, while introducing new departments such as Furniture, Bed & Bath, Entertainment, and Cook & Grill.

 A few of the active retail developers in San Antonio include Thomas Enterprises, which is developing The Rim; NAI/Rohde Ottmers & Siegel Realty Services, currently developing a new strip retail center called Madison’s Market on the northwest corner of Potranco Road and Loop1604 in Richland Hills; Hill-Granados Retail Partners, transforming the old Central Park Mall at Loop 410 near San Pedro Avenue into Park North—a mixed-use center including, retail, entertainment and office space; Reata Real Estate Services, developing the H-E-B plus! in Stone Ridge; and Turnberry Associates, which are developing Regal Hills.

 Another retail development currently underway is Santikos Investments’ The Legacy — an urban-themed, mixed-use lifestyle center with 600,000 square feet of retail space, as well as 50,000 square feet of office and 300 multifamily units. Located at the northeast corner of U.S. 281 and Loop 1604, current anchor tenants of The Legacy include Best Buy, Lifetime Fitness, Sportsmans Warehouse & Marriott Hotel.

 A new retailer to the San Antonio market includes Bass Pro Shops. Located at The Rim, at the intersection of Interstate Highway 10 and Loop 1604, the new 180,000-square-foot store will be one of the largest retail centers in San Antonio and the third Bass Pro Shops Outdoor World in Texas.

 The submarket that people should keep an eye on in the near future is the Far West area, according to Glen. This submarket is bordered by Culebra Road, State Loop 1604, U.S. Highway 90 and Texas Research Parkway/State Highway 211. “With approximately 67,000 new residences either planned or under construction, this area is expected to see tremendous growth during the next decade,” Glen says. “It is located close to employers that have large campuses in the nearby Westover Hills area including Chase Bank, World Savings, Orberthur and Takata. Following closely behind this vast new residential area will be retail space to meet the rising demand.”

 The Broadway corridor that stretches from downtown north to Hildebrand Avenue also seems poised for a renaissance. Earl Abel’s Diner, a San Antonio institution for decades located on the southeast corner of Hildebrand Avenue and Broadway Street, recently was purchased and demolished to make way for a 24-story, 99-unit luxury high-rise, according to Glen. Closer to downtown, a strip of once abandoned car dealerships is slowly being bought up, with office buildings, lofts, and new retail replacing the empty lots. “A key reason behind this activity is the city’s plan to extend the popular Riverwalk north, slightly past the Witte Museum, through the abutting Brackenridge Park in a plan called Museum Reach,” Glen says. “There is also a similar plan to extend the Riverwalk south to connect the Alamo with the other four Spanish Missions, aptly named Mission Reach.”

 “Retail is finally starting to pick up steam, trying to make up for time lost in the past,” Glen says. “This is due to large amounts of outside capital being invested in the area by national and international companies. Looking forward, San Antonio will continue to make great strides in total retail space inventory, as well as garner more interest from regional and national players.”

 — Martyn Glen is managing director with Integra Realty Resources in San Antonio.

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