The plant will bring demand for more industrial facilities in south Bexar County, an area that's been virtually ignored by all types of commercial development. Beginning with a sharp increase in the land market, an upswing in the industrial market will follow with residential and retail development not far behind, according to a Grubb & Ellis Co. study on the plant's impact.
The site is large enough for Toyota's two-million-sf plant and another plant, if it expands. "It was far enough, it was flat enough and it had all the utilities," Kit Corbin, the Grubb & Ellis land manager who conducted the site search, tells GlobeSt.com. "It was perfect for Toyota." For previous story, click here.
The 2,000 acres where Toyota will settle is about 10 miles south of downtown San Antonio and outside Loop 410, the highway that rings the city. It is, for the most part, undeveloped land. That suits Toyota to a "T," says Corbin. "Toyota wants, more or less, to be by themselves," he says. Land south of the site is controlled by the City of San Antonio and the San Antonio Water System and is likely to remain green space or become a park.
Toyota won't be too lonely, however, as its suppliers and others have descended on the area to claim sites. The land market has experienced what the report calls tremendous activity in the months since Toyota said a south Bexar County site was under consideration, according to the Grubb & Ellis report.
The report says the new demand has sparked an increase in land prices as users and investors shop the market. The report said an 800,000-sf user is looking at building on a site Toyota passed up. Also, plans are in the works for a 530-acre Applewhite Industrial Park right across from the Toyota site.
For the industrial market, the report says the project's impact will center on the south side with reverberations rippling through the area. The report says the project could generate demand from Toyota suppliers for 5.3 million sf based on Toyota's benchmark of 1,000 per sf per employee.
If current inventory were used, it would drop the industrial vacancy rate to less than 5% from more than 15%, according to the report. More likely, however, many suppliers will require new construction. That might center on areas such as the Freeport Business Centre at Loop 410 and Interstate 35 as well as in build-to-suit, owner-built or speculative properties built over several years.
Toyota expects to have 2,000 employees itself and suppliers will add another 5,300. That, Grubb & Ellis says, will sharply increase demand for higher-end new housing outside Loop 410.
"San Antonio has a huge labor supply that's been waiting for a major employment source to come along," Corbin says.
There are some obstacles to overcome, Grubb & Ellis says. There is limited access to utilities outside Loop 410, which could increase the price of development. However, the report says, developers are paying as much as $100,000 per acre on San Antonio's north side. That's more than 10 times the cost of south side land.
Current roads outside Loop 410 couldn't handle the increase in commuter and heavy truck traffic, according to the report. San Antonio has promised to improve the roads as part of its agreement with Toyota.
More residents with higher incomes will attract retail development to the area. Anchored shopping centers, big box retailers and restaurants will pop up at major intersections in the area.
The growth probably will spill over into communities south of San Antonio, researchers conclude. Communities such as Floresville and Poteet, with infrastructure and services in place, will be prime bedroom communities and will attract retailers along with rooftops.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
