Downtown San Antonio’s office market, which has seen vacancies reach about 27 percent according to CBRE, could see renewed interest as Project Marvel progresses. The $4 billion redevelopment, centered around a new San Antonio Spurs arena and entertainment district, is drawing attention from both tenants and investors.
After major companies like USAA, Visionworks, and PricewaterhouseCoopers left the downtown area, the market was left with excess space. Despite this, brokers report that there is an uptick in tenant inquiries. Amegy Bank’s recent lease of 44,000 square feet at 300 Convent stands out as a significant deal. Brokers also suggest that if interest continues to grow, more leases in the range of 5,000 to 20,000 square feet could follow.
Joe Bright, senior vice president at Partners Real Estate, said more corporate tenants are seeking tours and surveys downtown but many have yet to sign leases. “It seems like there’s still a little bit of a hangup in the execution,” Bright said. He noted that concerns about parking and traffic remain barriers for some companies. However, Bright believes visible construction progress on Project Marvel could change attitudes: “Once you start to see dirt moving … then it’ll switch.”
On the investment side, John Taylor of CBRE reported increased interest from buyers looking for quality buildings at reasonable prices. “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 added that downtown is becoming more attractive under these criteria.
The redevelopment aligns with trends seen in other cities where central business districts are being transformed into mixed-use neighborhoods rather than areas focused solely on offices. However, uncertainty remains regarding whether Project Marvel will be enough to significantly lower vacancy rates.
Project Marvel’s funding component was put before voters by the Bexar County Commissioners Court in August. The San Antonio City Council recently agreed to continue negotiations with Spurs Sports and Entertainment over a term sheet for the project. It remains uncertain whether Mayor Gina Ortiz Jones will continue opposing the development.
For now, local real estate professionals say they are waiting to see if momentum around Project Marvel results in signed leases and physical changes downtown.
