A tech firm’s lease renewal in San Antonio indicated a reset in the city’s struggling office market, as it is slashing its footprint in half.
Oracle reupped for 34,000 square feet in the Spectrum building, at 613 Northwest Loop 410, the San Antonio Business Journal reported. Although it is reducing its space, it is keeping twice as much as previously planned, the outlet reported.
Oracle leased four floors in the 10-story building prior to the pandemic and had been negotiating to stay in one floor, the outlet reported. The firm’s return-to-office efforts have been successful enough that it kept two floors.
The lease brings the 176,000-square-foot building to 76 percent leased and is a win for landlord Hartman vREIT XXI, a subsidiary of Houston-based Hartman Properties, which has owned the building since 2019.
The renewal “underscores the city’s appeal as a prime business destination,” Hartman founder Allen Hartman told the outlet. Oracle has found a talent pool in San Antonio, where the cost of living is affordable, said Margaret Hartman, the firm’s chief operating officer.
The landlord is planning to build out flexible work spaces for prospective tenants.
“We’ve budgeted and are allocating funds to this building because of the leasing activity that we see,” Margaret Hartman said. “We want to be able to have some spaces that are made ready and able to be leased because we see an increased amount of leasing interest in the Spectrum building.”
San Antonio’s office vacancy sat at 17.6 percent in the first quarter, according to JLL. That’s significantly lower than the other Texas metros, where the average vacancy is well over 20 percent, and it’s 4.3 percent lower than the national average.
No office developments are under construction in the Alamo City, a first since 2005, indicating that there is room for absorption, according to JLL.
Meanwhile, Allen Hartman is embroiled in nasty legal battles with the executive board of another company he founded, Silver Star Properties.
—Rachel Stone
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