What's Happening?
AT&T Inc. is set to vacate its 401,516-square-foot building at 1010 N. St. Mary's St. in downtown San Antonio next summer. The move marks a significant shift for the company, which was once headquartered in the city before relocating to Dallas in 2008. AT&T plans to relocate to an office complex in Westover Hills, occupying over 100,000 square feet. This decision comes as a blow to the downtown San Antonio office market, which has been struggling with high vacancy rates. The building, originally sold by AT&T in 2014 to a company affiliated with Global Net Lease Inc., has been leased by AT&T since then. The company has been gradually reducing its presence in the area, having sold other properties, including an eight-story building on Broadway to the University of the Incarnate Word in 2019.
Why It's Important?
AT&T's departure from downtown San Antonio is a significant development for the local office market, which is already facing challenges. The vacancy rate in downtown San Antonio is currently at 17.8%, higher than the citywide average of 11.4%. The move could exacerbate the existing issues in the urban core, potentially leading to further economic implications for local businesses and real estate stakeholders. As companies continue to adapt to post-pandemic realities, the demand for office space in traditional business districts is shifting, with many opting for newer buildings with modern amenities. This trend could lead to a reevaluation of urban planning and economic strategies in San Antonio and similar cities.
What's Next?
The relocation of AT&T to Westover Hills may prompt other companies to reconsider their office space needs in downtown San Antonio. Real estate developers and city planners might need to explore new strategies to attract businesses back to the urban core, possibly by offering incentives or redeveloping existing spaces to meet modern demands. Additionally, the impact on local businesses that rely on the foot traffic generated by office workers could lead to further economic adjustments in the area.
