Downtown San Antonio’s office market could see changes as Project Marvel, a $4 billion redevelopment plan anchored by a new Spurs basketball arena and entertainment district, moves forward.
According to CBRE, the central business district currently faces an office vacancy rate of about 27 percent. The exit of large tenants such as USAA, Visionworks, and PricewaterhouseCoopers has contributed to a surplus of available space. Despite this, brokers report that interest is rising among potential tenants.
Amegy Bank recently signed a 44,000-square-foot lease at 300 Convent, one of the larger recent deals in the area. Brokers say there may be more smaller leases ranging from 5,000 to 20,000 square feet if momentum continues.
Joe Bright, senior vice president at Partners Real Estate, noted increased activity: “It seems like there’s still a little bit of a hangup in the execution,” he said. He cited ongoing concerns about parking and traffic but added that visible construction progress on Project Marvel could be pivotal: “Once you start to see dirt moving … then it’ll switch.”
On the investment front, John Taylor, CBRE’s senior vice president in San Antonio, observed growing interest from buyers seeking value opportunities downtown. “I’ve actually received questions from a handful of clients saying, ‘Where are some really nice quality buildings for reasonable or aggressive economics right now?’” Taylor said. He indicated that downtown properties are increasingly being considered as answers to these inquiries.
The direction for downtown San Antonio aligns with trends seen in other cities where central business districts are evolving into mixed-use neighborhoods rather than being limited to office use alone. However, uncertainty remains regarding whether Project Marvel will succeed in reducing vacancies due to fragile leasing demand and risks associated with project execution.
Recent developments include Bexar County Commissioners Court deciding in August to send the county’s funding portion for Project Marvel to voters this November. The San Antonio City Council has also chosen to continue negotiations with Spurs Sports and Entertainment over development terms. It remains unclear whether Mayor Gina Ortiz Jones will persist in opposing the project.
For now, industry observers say that while optimism exists around Project Marvel’s potential impact on downtown San Antonio’s office market, significant improvement will likely depend on actual construction progress and further commitments from both public officials and private stakeholders.
