San Antonio cloud computing outfit to exit 1.6M sf campus in dramatic downsizing

Rackspace call end to 14-year run at Windcrest HQ

From left: Rackspace's Casey Shilling and Windcrest Mayor Dan Reese
From left: Rackspace's Casey Shilling and Windcrest Mayor Dan Reese (Windcrest, Getty, Rackspace)

Rackspace Technology is leaving the 1.6 million square-foot mall it bought as a headquarters campus and redevelopment project in Windcrest for less than 100,000 square feet in nearby North San Antonio.

Rackspace, a publicly-traded cloud computing company, announced the move as part of a downsizing of its space at the Windsor Park Mall in an inner suburb of San Antonio. The firm indicated it will be moving a smaller space–probably between 70,000 and 95,000 square feet–in Ridgewood Plaza II in North San Antonio.

Windcrest Mayor Dan Reese confirmed the news with the San Antonio Business Journal on October 21, adding that the move is expected to happen next year.

“We were informed this morning,” Reese said. “They met with me first and we’re working through the details.”

The economic ramifications for the small town of 5,865—according to the 2020 census— remains unclear. There also is no word yet on plans for the massive piece of real estate that Rackspace bought at a bargain-basement price of $27 million in 2012, turning the moribund retail center into its headquarters.

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“They have indicated they’re going to work with us to see what we can do to transition that building to something that would be obviously useful to the city,” Reese said.

Reese confirmed that Windcrest and Rackspace did have some form of a master economic development and incentive agreement in place and that the company said it intends to honor that deal. How or when this will play out is unknown but he did say the city could receive some compensation as a result of the company’s departure.

“We’re going to work with them to do the best thing for Rackspace and also for the city,” Reese said.

Casey Shilling, chief marketing officer for Rackspace, said the company plans to relocate its operations to Ridgewood Plaza II, where it plans to occupy between 75,000 and 90,000 square feet of space. Like many companies, a significant portion of Rackspace’s workforce has moved to a remote model since the pandemic. Both Reese and Shilling said that accommodating remote work was a big factor in the decision. The firm also wanted to relocate to an area closer to where most of its workforce lives, according to Shilling.

Maddy Sperling