Posted Nov 13, 2014, 12:02 PM
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Loving SA 365 days a year
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Join Date: Feb 2007
Location: San Antonio
Posts: 3,890
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VACANT RIVER WALK PROPERTIES PUT IN PLAY
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Marshall Davidson Jr. and his team at KMD Studley, a commercial real estate brokerage firm, have assembled some of the downtown River Walk’s last vacant properties and adjacent parcels and are shopping them to a national audience of developers.
They’ve bundled a portfolio of six previously unavailable properties controlled by five different owners to create the kind of ground-up development opportunity that they say has been missing in San Antonio’s downtown revitalization efforts. There are no prices attached to the parcels, and Davidson said the owners are open-minded.
Other developers have said in the past that owners of downtown parcels have unrealistic expectations of their value, and their unwillingness to sell at market rate has impeded downtown redevelopment. The KMD Studley package should prove to be a good test of what buyers are willing to pay to develop in the most affordable downtown of any major Texas city.
Most of the buildings are vacant or underutilized, though some are occupied by tenants with multi-year leases. The City’s passage in June of a Vacant Building Ordinance that goes into effect on Jan. 1, 2015 could serve as a catalyst for absentee property owners to sell now rather than face costly building upgrades or fines.
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The properties are within easy walking distance of the Tobin Center for the Performing Arts to the east and the Southwest School of Art to the west, the Central Library to the north and the Central Business District’s Class A office towers, Bank of America Plaza, the Weston Centre and One Riverwalk Place, to the south.
“The most incredible thing is they are six River Walk blocks, totaling six acres in downtown San Antonio, in the same stretch of river, and all of it looks like it can be developed from the ground up. This includes a site tested for a 500,000 sq. ft. headquarters tower and parking structures,” Davidson said. “Now you have six blocks on the river where you can build brand new, efficient and modern buildings and park them. I don’t know of another city in the U.S. where you can do this on this scale.”
Davidson was referring to site testing that was conducted in 2006 on behalf of AT&T Corp. when the Fortune 500 company was still based in San Antonio and executives were considering construction of an office tower downtown to serve as a new corporate headquarters. The company that moved here from St. Louis in 1993 decided instead to relocate to Dallas in 2008.
National developers, Davidson said, will take a closer look when they learn that AT&T seriously vetted the site for its own use.
The opening of the Tobin Center, the evolution of the former Southwest Crafts Center into the accredited, four-year Southwest School of Art, and the proximity of Artpace and the Central Library, Davidson said, could serve as anchor institutions in an emerging arts and entertainment district.
The portfolio includes the downtown’s most-cited example of a vacant, blighted building, the 10-story Hedrick Building, which has sat unused for more than two decades on 1.4 acres of property on the northwest corner of North St. Mary’s and East Martin Streets. The prime riverfront property includes parking and a smaller attached building.
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KMD Studley’s move comes on the heels of Weston Urban’s ambitious proposal to build downtown San Antonio’s first new office tower in more than 25 years to serve as a new corporate headquarters for Frost Bank, while also acquiring a number of other properties from the bank and the City of San Antonio in a complex swap. That proposal and a competing proposal from Primera Properties are under review by the City.
The Weston Urban proposal and KMD Studley’s marketing effort, if successful, could set off multi-block redevelopment efforts downtown that would attract more jobs, create more residential units and expand the tax base.
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