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San Antonio Express News Article

Web Posted Posted: 03/02/08 12:14 PM

Experts in San Antonio's real estate market remain cautiously optimistic about commercial prospects around the city.
Six panelists discussed the pros and cons of the market Thursday at a Commercial Real Estate Women's forum at the Convention Center.
"We will never be the sexiest kid on the block," said Mark Granados, managing partner with HPI Real Estate Services & Investments. But he added that San Antonio still has a lot in its favor, such as several job-growth industries.
In North Central San Antonio, big things are continuing to happen with Park North, the 1-million-square-foot Central Park Mall redevelopment project led by HPI. Granados said a deal was signed last week with Dallas developers Hillwood and Champ Development to bring in an Aloft hotel from Starwood Hotels & Resorts Worldwide Inc.
The brand is a limited-service version of Starwood's W Hotels and will have 141 rooms featuring a loft-inspired design., Also, he said, other new tenants at the massive project include La Madeleine, World Market and FedEx Kinko's. Target also is set to open in mid-October
In spite of Park North filling up with tenants, Granados cautions that the city is starting to get oversupplied with projects, noting that only Las Vegas and Phoenix are building more new retail space.
"Unanchored strip centers are dramatically overbuilt," he said. "Some have been completed six to 12 months, and they still sit vacant. The market appreciates the value of having an anchor at a project."
Because of market conditions, Granados said, retailers are opening fewer stores, making cities compete for their business. San Antonio's demographics lend itself to retailers such as Target and Wal-Mart, while Austin can get the higher-end shops.
In the office segment, more than 1.2 million square feet of office space is under construction across San Antonio, which is about, 5 percent of the existing supply, said Lisa Villarreal, marketing director with Travis Commercial Real Estate Ser¬vices.
Rents are rising throughout town.
"It's a healthy office market," Villarreal said. "It's healthier than I've ever seen."
Land is being cleared for another huge mixed-use project at the southeast corner of Loop 1604 and Interstate 10 for The Landmark, which will have 1 million square feet of office space, 500 hotel rooms and 575,000 square feet of retail space, said, William T. Kaufman, attorney for Kaufman & Associates Inc. in San Antonio, who represents The Landmark's developer, Galo Properties.
Despite the forum's commercial focus, panelists also spoke about San Antonio's housing market.
Lisa Schmidt, a real estate agent with The Phyllis Browning Co., spoke about the city's growing condo market and how it can help drive the overall real estate economy and expand the boundaries of downtown.
Aside from the well-known projects — such as Alteza, Vidorra and Judson's Candy Factory Lofts — some up-and-coming projects include the 1221 Broadway and the Eighteen Hundred.
The 1221 Broadway project is a revitalization of the abandoned Villaje del Rio complex at Broadway and Interstate 37. It's being redeveloped by Cross & Co., and will have 290 loft-style apartments and 80,000 square feet of office/retail space, Schmidt said.
The Eighteen Hundred is being developed by Regent Cos., which also is building the Clay Street Flats next to La Tuna. The Eighteen Hundred, across Broadway from the Pearl Brewery, will have 205 apartment units and about 6,000 square feet of retail/office space, Schmidt said.
"The idea of the highway intersection being the boundary of downtown is slowly going away," Schmidt said.
In the single-family market, the big news seemed to be home sales at Cibolo Canyons. The subdivision, home to two PGA golf courses and a JW Marriott, has seen brisk sales, 'said Kaufman, who also represents Cibolo Canyons' developer, Forestar Real Estate Group.
The higher-priced homes have been the most popular, and the neighborhood will host this year's Parade of Homes with houses starting at around $800,000, Kaufman said.
"There's a pent-up demand for more quality homes in the $500,000 to $1 million range," he said.