Downtown New Braunfels Master Plan Market Analysis

Transcription

Downtown New Braunfels Master Plan Market Analysis
CAPITOL
MARKET
RESEARCH
Downtown New Braunfels Master Plan
Market Analysis
Prepared for
Torti Gallas and Partners
Mr. Neal Payton
y
523 W. 6th Street
Suite 212
Los Angeles, CA 90014
byy
Capitol Market Research, Inc.
Inc
901 Rio Grande, Suite 201
Austin, Texas 78701
(512) 476
476-5000
5000
on
June 12, 2009
TABLE OF CONTENTS
ii TABLE OF CONTENTS
v List of Tables
vi EXECUTIVE SUMMARY
San Antonio Market Overview
vi Retail Market Conditions in New Braunfels and Downtown
vi Multi-Family Market Conditions in New Braunfels and Downtown
vi Office Market Conditions in New Braunfels and Downtown
vii Hotel Market Conditions in New Braunfels and Downtown
vii Implementation Strategy
vii viii Introduction
4 Demographic Trends and Forecasts
Historical Trends
4 Population & Household Forecast
4 San Antonio Retail Market Conditions
9 Retail Market Overview
9 Current Market Conditions
9 12 New Braunfels Retail Market Conditions
Overview
12 New Construction
12 Occupancy & Absorption
12 Average Rents
12 Market Outlook
12 Planned Retail Projects
15 Downtown New Braunfels Retail Market Conditions
17 Overview
17 New Construction
17 Occupancy & Absorption
17 Average Rents
17 Market Outlook
17 Opportunity
17 New Braunfels Primary Market Area Purchasing Power
20 Estimates of Purchasing Power
21 ii
Planned Retail Development
22 Multifamily Market Trends in the San Antonio MSA
25 Apartment Market Overview
25 Current Market Conditions
25 27 New Braunfels Apartment Market Conditions
Overview
27 New Construction
27 Occupancy
27 Average Rents
27 Market Outlook
27 Planned Apartment Projects
30 Downtown New Braunfels Apartment Market Conditions
32 Overview
32 New Construction
32 Occupancy
32 Average Rents
32 Market Outlook
32 Opportunity
32 34 Office Market Trends in the San Antonio MSA
Office Market Overview
34 Historical Market Trends
34 Current Market Conditions
34 Office Market Trends in the New Braunfels Market Area
36 Office Market Overview
36 New Construction
36 Occupancy and Absorption
36 Average Rents
36 Market Outlook
36 Downtown New Braunfels Office Market Conditions
39 Overview
39 New Construction
39 Occupancy & Absorption
39 Average Rents
39 Market Outlook
39 Opportunity
39 iii
Office Space Demand
41 Comal County and Downtown New Braunfels Absorption Forecast
43 45 Hotel Trends in the San Antonio Region
Hotel Market Overview
45 New Construction
45 Occupancy
45 Average Daily Rates
45 Market Outlook
45 47 Hotel Trends in New Braunfels
Overview
47 New Construction
47 Occupancy
47 Average Daily Rates
47 Market Outlook
47 49 Hotel Trends in Downtown New Braunfels
Overview
49 New Construction
49 Occupancy
49 Average Daily Rates
49 Market Outlook
49 Opportunity
49 52 Market Assessment for Downtown New Braunfels
Commercial Development Opportunities
52 Office Development Opportunities
52 Residential Development Opportunities
53 Hotel Development Opportunities
53 Opportunity Sites
54 Downtown Study Area Land Use and Value
56 Downtown Development Implementation Strategy
58 The Vision for Downtown New Braunfels
61 Building Inventory and Square Footage by Type of Use
62 APPENDIX
63 65 CHARLES H. HEIMSATH: QUALIFICATIONS
iv
List of Tables
Page
Table (1)
Table (2)
Table (3)
Table (4)
Table (5)
Table (6)
Table (7)
Table (8)
Table (9)
Table (10)
Table (11)
Table (12)
Table (13)
Table (14)
Table (15)
Table (16)
Table (17)
Table (18)
Table (19)
Table (20)
Table (21)
Table (22)
Table (23)
Table (24)
Table (25)
Table (26)
Table (27)
Table (28)
Table (29)
Table (30)
Employment Growth, San Antonio MSA
Census Population Estimates 2000-2008, San Antonio MSA, Comal County, City of
New Braunfels
Annual Change in Census Population 2000-2008, San Antonio MSA, Comal County,
City of New Braunfels
Population & Household Growth by Market Area Zip Codes, Market Area, Comal &
Guadalupe Counties and San Antonio MSA: 1990-2000
Primary Market Area Population & Household Forecast, 2000-2023
Gross Retail Sales, San Antonio MSA 1995-2008
Retail Market Summary, San Antonio: 2000-2008
New Braunfels Market Area Retail Summary, April 2009
Planned Retail Projects, New Braunfels Market Area
Downtown New Braunfels Market Area Retail Lease Listings, June 2009
Current Purchasing Power, New Braunfels Primary Market Area (78130 & 78132)
Estimated Purchasing Power, Primary Market Area (78130 & 78132)
Supply and Demand Comparison, San Antonio CBD Market Area
Downtown New Braunfels Retail Space Demand, Cumulative Retail Demand
San Antonio Citywide Apartment Market Summary, 1997-1Q 2009
New Braunfels Market Area Apartment Summary, 2000-2009
Planned Apartment Projects, New Braunfels Market Area
Primary Market Area & CBD Apartment Demand Forecast, 2000-2023
Office Market Summary, San Antonio, 2000-2008
New Braunfels Market Area Office Summary, May 2009
Downtown New Braunfels Market Area Office Lease Listings, June 2009
Office Employment Growth, San Antonio MSA
Comal County Employment Growth
Office Space Absorption Forecast, Comal County and Downtown Market Area
Hotel Market Summary, San Antonio Market Area
Hotel Market Summary, New Braunfels
Hotel Market List, New Braunfels
Downtown New Braunfels Master Plan, Parcel Values by Land Use Category
Market Opportunities
Downtown New Braunfels Land Use by Category
v
3
5
5
6
8
10
11
13
15
18
20
21
23
24
26
28
30
33
35
37
40
42
43
44
46
48
50
56
60
62
EXECUTIVE SUMMARY
Capitol Market Research was retained as a subconsultant of Torti Gallas and Partners, Inc. to examine the
potential for retail, residential, office and hotel development in downtown New Braunfels, Texas as part of the
Downtown New Braunfels Masterplan and Design Ordinances consulting assignment. The market analysis will
establish the economic context that affects downtown and will help to provide the market justification for the
Masterplan concepts. The report which follows the executive summary provides a regional and countywide
population and employment forecast and estimates the potential demand for retail, residential, office and hotel
space in the downtown area.
San Antonio Market Overview
Overall, the San Antonio regional economy remains healthy, in spite of the national recession and the
increasing rate of unemployment. The relatively strong job growth rate of 2.5% in 2008 is expected to turn
negative in 2009 (-0.71%) with a projected loss of 6,023 jobs. But the decline is expected to be short-lived with
a job growth of 9,725 expected in 2010 and 31,515 in 2011.
All sectors of the San Antonio real estate market have been affected by the current weakness in the national
economy. New home construction and sales have declined and the median home price has dropped slightly.
Retail occupancy has begun to drop and new store expansion has virtually ceased. The multi-family market is
also experiencing a slowdown with stagnant rents and declining occupancy in many parts of the region. The
office market occupancy rate has dropped to 82,9% which is the lowest it has been since 2003. The slowdown
in new job creation and a dramatic increase in inventory in 2008 are causing a slowdown in absorption and
downward pressure on rents. The Hotel market remains relatively healthy, but the decrease in convention
business has affected both occupancy and average room rates.
Retail Market Conditions in New Braunfels and Downtown
The 12 existing multi-tenant shopping centers in the New Braunfels retail market area currently have an
average occupancy of 89.8% and an average rental rate of $16.07 for “shop” space. In spite of the recent
addition of Town Center at Creekside (270,000 sq.ft.) the overall inventory of shopping center space is
relatively low, at 1.25 million sq. ft. and consumer buying power exceeds retail sales in the New Braunfels
market area.
The Downtown study area currently has 54 individual retail buildings and 300,554 sq. ft. of ground floor retail
space. Although, with rents ranging from $8.00 to $12.00, the Downtown rates are substantially lower than the
New Braunfels market area. However, this lower price is offset by a higher occupancy of 92.5%, due in large
measure to a substantial number of owner occupied buildings.
The relatively high occupancy rates and population growth in the New Braunfels and Downtown New Braunfels
market areas are strong enough to justify more retail development and leasing (560,000 sq. ft. in 2009). CMR
believes that the downtown study area could potentially capture 9.5% of the growth in demand through 2023
which would result in the absorption of 230,000 sq. ft. of additional retail space. The best suited tenants for this
space are specialty retail stores that sell “occasional” or specialty goods and services. The recruitment of
additional specialty retail stores would help to establish a “critical mass” of shopping blocks in the Downtown
study area.
Multi-Family Market Conditions in New Braunfels and Downtown
Among the 19 apartment communities in New Braunfels, the April 2009 multi-family occupancy rate is 90.8%,
with two properties currently in “lease-up”. The average rental rate at $0.92 per sq. ft. exceeds, by 10.8%, the
average rate in San Antonio and absorption in New Braunfels consistently exceeds the rate of new unit
delivery. Future demand for apartments in New Braunfels will average 250 to 300 units per year, with most
development occurring along Loop 337.
While there are no large apartment communities in the Downtown study area, the Landmark Gardens and
Landmark Lofts are located just north of downtown at 144 Landa Street. As of April 2009, these projects were
vi
occupied at 85.4% with substantially higher rental rates which average $1.30 per square foot. Both the
Landmark Gardens and Lofts have a diverse tenant mix of young professionals, empty nesters and retirees
whose presence near downtown suggest a ripe opportunity for more “infill” development in downtown. Although
land availability is a major constraint to new development, converting an older, underutilized building downtown
is an option for multi-family expansion. The anticipated demand for the study area could support the
construction and absorption of 300 units through 2023.
Office Market Conditions in New Braunfels and Downtown
The multi-tenant office market in New Braunfels is just emerging as a definable commercial market with
approximately 250,805 sq. ft. of office space in 11 multi-tenant buildings located in downtown and on E.
Common Street. The current market area occupancy rate is 89.0% and recent absorption rates have averaged
approximately 39,000 sq. ft. per year, a figure that is expected to rise as the employment base in the area
expands.
The Downtown New Braunfels study area office inventory contains more office space than the entire multitenant market in the city, with 292,978 sq. ft., however occupancy in the area is substantially lower, at 80.9%.
The higher than average vacancy rate is partially due to the inclusion of “unfinished” second floor space in the
two story buildings on San Antonio Street, excluding this space, the occupancy rate increases to 84.6%. The
average rental rate, however, exceeds the market average at $17.72 per square foot (gross).
In Comal County the demand for new office space will exceed 624,000 sq. ft. through 2020 and the downtown
area should capture an average of 6.9% for a total of 43,000 sq. ft. through 2020. This level of demand
suggests a modest potential for office growth within the downtown area. The vacant second floor space in
several downtown buildings seems ripe for conversion to office use, however most of the existing second floor
space will need updating and building owners or tenants may need financial assistance or tax breaks to make
the necessary upgrades economically viable.
Hotel Market Conditions in New Braunfels and Downtown
As of April 2009, there were a total of 28 hotels and six more under construction in the New Branfuels market
area which will bring the area total number of rooms in the area to 2,294 at the end of 2009. Among the
existing hotels, the average occupancy rate for 2008 was 61.4% with an average daily rate of $78.99. This low
average daily rate reflects the high concentration of economy and extended stay hotel rooms in the city.
The Downtown New Braunfels study area has only two small hotels, the Prince Solms Inn and the Faust Hotel
with a total of 75 units. None of the new construction is located within the study area, however, the newly built
Civic Center on Seguin Avenue should generate a strong market opportunity for a mid-size, select service hotel
with approximately 150 rooms. Finding 3-5 contiguous acres for this development will be a challenge in
downtown and a smaller site will require an expensive parking garage. However as part of this analysis CMR
has identified 6 potential “opportunity sites” for either a select service hotel or a mixed use development.
These sites include the 444 Bar and Grill location at 444 E. San Antonio, the current site of the Producer’s CoOp at 210 S. Castell, Elk’s Lodge at 353 S. Seguin Ave., the ADM Mill on E. San Antonio St., the Faust Hotel
and parking lot at 240 S. Seguin Ave., and the current location of City Hall at 424 S. Castell.
Implementation Strategy
The preceding information summarizes the market conditions and indicates current opportunities for
development downtown. In order to take advantage of these opportunities, CMR has proposed a development
implementation strategy which includes five key initiatives. (1)Solidify and expand the core retail district on S.
San Antonio St., (2)expand the mix of uses to include more hotel rooms and entertainment venues, (3)encourage
downtown residential and mixed use development, (4)support the expansion of commercial and residential uses
with an effective parking strategy and (5)establish a Downtown New Braunfels Development Corporation. An
effective strategy for creating a vibrant Downtown New Braunfels must address these issues in conjunction with
the other strategies proposed in the downtown plan.
vii
Introduction
The purpose of this market analysis report is to examine the potential for retail, residential, office and
hotel development in downtown New Braunfels, Texas and to provide a market basis for the downtown
masterplan. The success of the Downtown New Braunfels Masterplan is dependent upon an accurate
examination of four commercial real estate segments, retail, multi-family, office and hotel. The health and
potential growth in each market determines the types of shops, residences, businesses, lodging and
entertainment venues that are necessary to further enhance the Downtown study area.
This report is organized by market segment with each market evaluation beginning at the regional level
(San Antonio) then progressing to the overall New Braunfels market area and finally to the micro market,
the Downtown New Braunfels study area. It is necessary to analyze the overall health of markets beyond
the micro level in order to establish the context within which the Downtown New Braunfels markets
compare to the City of New Braunfels and to the regional (San Antonio) area.
The analysis begins with historical employment and demographic trends to provide a context for the study
area. From there, each market segment is evaluated historically through an examination of rental rates,
occupancy and absorption and a discussion of new development that is emerging in the area. In addition,
the retail section examines purchasing power on a county and local level while the office section reviews
employment growth and office demand at both the macro and micro levels.
viii
General Area Analysis
History
The historic center of downtown New Braunfels is located at the intersection of Seguin Street and W. San
Antonio Street just south of the Comal River in the City of New Braunfels, Texas. The City of New
Braunfels is significantly influenced by the economic base of San Antonio and the San Antonio
Metropolitan Statistical Area (MSA). Comal County is generally bounded on the east by Guadalupe
County, on the north by Hays and Blanco Counties, on the south by Bexar, and on the west by Kendall
County. The San Antonio MSA is currently comprised of Atascosa, Bandera, Bexar, Comal, Guadalupe,
Kendall, Medina and Wilson counties. In 2000, it was comprised of Bexar, Comal, Guadalupe and Wilson
Counties. According to the U.S. Bureau of the Census, the San Antonio MSA was the 30th largest (by
population) in the United States in 2000. Figure (1) provides the location of these counties.
New Braunfels is the county seat of Comal County and the San Antonio MSA is one of the fastest
growing regions in the country. Employment growth in the San Antonio area grew steadily in the nineties
with annual increases ranging from 6,000 (1991) to 21,000 (1999). Overall growth in San Antonio
declined from 2000 through 2003, and by year-end 2003, the MSA reported negative job growth of 2,500
jobs. However, the market quickly began to recover with the addition of 9,158 jobs in 2004, 21,450 in
2005 and 29,500 in 2006. Then the economy began to slow down again in 2007, when 20,900 jobs were
added and in 2008 when job growth was 20,799. According to the most recent forecast for the region
from economy.com, the region is expected to lose 6,023 jobs in 2009, but rebound in 2010 with the
addition of 9,725 jobs.
1
San Antonio MSA
GILLESPIE
TRAVIS
BLANCO
KERR
HAYS
KENDALL
AL
BANDERA
CALDWEL
COMAL
GUADALUPE
VALDE
MEDINA
BEXAR
GONZAL
WILSON
AVALA
MMIT
FRIO
LA SALLE
c:\Projects\2005\samsa.apr
ATASCOSA
MCMULLEN
N
KARNES
LIVE OAK
0
50
100 Miles
BEE
Prepared by Capitol Market Research, October 2005
Table (1)
Employment Growth
San Antonio MSA
Year
Total Wage &
Salary Earning
Employees
Annual
Change
Percent
Change
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
541,917
548,850
566,400
589,425
614,800
640,858
658,292
684,350
705,475
727,517
745,208
753,292
754,058
751,367
760,525
782,000
811,500
832,400
853,199
847,176
856,900
888,415
928,612
964,374
989,111
1,011,848
1,035,581
1,058,428
1,079,322
1,097,317
1,114,317
…
6,933
17,550
23,025
25,375
26,058
17,434
26,058
21,125
22,042
17,691
8,084
766
-2,691
9,158
21,475
29,500
20,900
20,799
-6,023
9,725
31,515
40,197
35,761
24,738
22,736
23,733
22,847
20,893
17,996
17,000
…
1.28%
3.20%
4.07%
4.31%
4.24%
2.72%
3.96%
3.09%
3.12%
2.43%
1.08%
0.10%
-0.36%
1.22%
2.82%
3.77%
2.58%
2.50%
-0.71%
1.15%
3.68%
4.52%
3.85%
2.57%
2.30%
2.35%
2.21%
1.97%
1.67%
1.55%
Source: Texas Workforce Commission, Annual Average Wage &
Salary Employment, 1990-2007
Forecasted employment for 2009 - 2020 from San Antonio
MSA forecast created by Moody's Economy.com April 2009
empgrow th.xls
5.00%
40,000
4.00%
30,000
3.00%
20,000
2.00%
10,000
1.00%
0
0.00%
-10,000
Years
Annual Change
Percent Change
3
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
-1.00%
% Change
50,000
1990
Annual Change
Employment Growth
Demographic Trends and Forecasts
Historical Trends
The City of New Braunfels 2000 population on April 1 was 36,494, but due to property annexations early
that year, the 2000 base estimate was adjusted upward to 38,019. On July 1, 2000 New Braunfels had
an estimated population of 38,311, which was 48.7% of the population in Comal County. Over the course
of the next seven years, the city added an average of 1,928 new people each year which was 51.3% of
the growth that occurred in Comal County and 5.3% of the growth that occurred in the San Antonio MSA.
The larger New Braunfels PMA (Primary Market Area, defined as zip codes 78130 and 78132) has
experienced a significant amount of population and household growth since 1990 when the area had
39,476 people living in 14,578 households. Total population in the subject area zip codes grew from
40,241 in 1990 to 54,206 in 2000, an increase of 37.7%. The 13,965-population increase during the
1990s was approximately 27.7% of total household growth in Comal and Guadalupe counties and 5.22%
of the growth experienced in the San Antonio MSA. In addition, recent trends in new building permits
issued in the market area suggest that the aggregate rate of growth has increased dramatically since the
late nineties, with the development of several new single-family subdivisions east of IH-35 and at the
northern edge of the city.
Viewed from the perspective of existing home sales, the New Braunfels PMA has accounted for
approximately 2.24% of MLS homes sales in the San Antonio region since 2000 and 24.2% of sales in
Comal and Guadalupe Counties. It should be noted, however, that New Braunfels has an independent
Board of Realtors and multiple listing service (MLS) and many properties that are locally sold do not make
it into the Sabor MLS System.
Population & Household Forecast
After reviewing the historical capture rate, new home sales and recent MLS activity in the market area,
and recognizing that the market area has a substantial amount of undeveloped land in inventory, a
market area population and household forecast has been prepared and is shown in Table (3) on page 7.
The household forecast shows a potential growth of approximately 1,696 new households added in the
Primary Market Area on an annual basis from 2009 through 2023. According to the 2000 census,
approximately 28.7% of the existing households were renters, and this is down by 2.0 percentage points
from 30.7% in 1990. Because this area has an abundance of vacant land and a number of large scale
single-family developments planned, it seems likely that the overall market will continue to be dominated
by owner-occupied single-family housing.
4
Table (2)
Census Population Estimates 2000 - 2008
San Antonio MSA, Comal County, City of New Braunfels
Year
MSA
Comal
County
New
Braunfels
County %
of MSA
City % of
County
2000
1,592,383
78,744
38,311
4.9%
48.7%
2001
1,621,360
81,419
39,357
5.0%
48.3%
2002
1,652,382
84,222
40,715
5.1%
48.3%
2003
1,680,872
86,919
42,266
5.2%
48.6%
2004
1,714,307
90,950
44,391
5.3%
48.8%
2005
1,746,454
94,626
46,389
5.4%
49.0%
2006
1,796,496
99,779
49,212
5.6%
49.3%
2007
1,846,408
104,751
51,804
5.7%
49.5%
2008
1,890,104
109,635
n.a.
5.8%
n.a.
Source: U.S. Bureau of Census, Annual Population Estimates
Table (3)
Annual Change in Census Population 2000 - 2008
San Antonio MSA, Comal County, City of New Braunfels
Year
MSA
Comal
County
New
Braunfels
County %
of MSA
City % of
County
2001
28,977
2,675
1,046
9.2%
39.1%
2002
31,022
2,803
1,358
9.0%
48.4%
2003
28,490
2,697
1,551
9.5%
57.5%
2004
33,435
4,031
2,125
12.1%
52.7%
2005
32,147
3,676
1,998
11.4%
54.4%
2006
50,042
5,153
2,823
10.3%
54.8%
2007
49,912
4,972
2,592
10.0%
52.1%
2008
43,696
4,884
n.a.
11.2%
n.a.
Average
37,215
3,861
1,928
10.3%
51.3%
Source: U.S. Bureau of Census, Annual Population Estimates
census.xls
5
Table (4)
Population and Household Growth by Market Area Zip Codes
Market Area, Comal and Guadalupe Counties and San Antonio MSA: 1990-2000
Zip Codes
78130
78132
Market Area
Comal County
Guadalupe County
Counties Total
San Antonio MSA
Zip Codes
78130
78132
Market Area
Comal County
Guadalupe County
Counties Total
San Antonio MSA
Population
1990
2000
1990-2000 %
Change
33,178
7,063
40,241
51,832
64,873
116,705
1,324,741
42,596
11,610
54,206
78,021
89,023
167,044
1,592,383
28.39%
64.38%
34.70%
50.53%
37.23%
43.13%
20.20%
Total Households
1990
2000
12,037
15,955
2,541
4,149
14,578
20,104
19,315
29,066
22,663
30,900
41,978
59,966
458,498
559,946
1990-2000 %
Change
32.55%
63.28%
37.91%
50.48%
36.35%
42.85%
22.13%
Population in Households
1990
2000
1990-2000 %
Change
32,425
7,051
39,476
50,941
63,549
114,490
1,293,622
42,596
11,610
54,206
76,754
87,411
164,165
1,554,475
31.37%
64.66%
37.31%
50.67%
37.55%
43.39%
20.16%
Average HH Size
1990
2000
2.69
2.67
2.77
2.80
2.71
2.70
2.64
2.64
2.80
2.83
2.73
2.74
2.82
2.78
1990-2000 %
Change
-0.89%
0.84%
-0.43%
0.13%
0.88%
0.38%
-1.61%
Source: US Bureau of the Census, 1990, 2000
Prepared by Capitol Market Research, April 2009
census.xls
6
New Braunfels Market Area
Zip Codes
Hays County
New Braunfels City Limits
´
0
2.5
5
Miles
Comal County
Bu
sin
e
ss
I- 3
5
78132
§
¨
¦
78130
35
Ev
an
s
Guadalupe County
Bexar County
c:\Projects\2009\New Braunfels Masterplan\zip.mxd
Prepared by Capitol Market Research, May 2009
Table (5)
Primary Market Area Population & Household Forecast
2000 - 2023
Year
Comal &
Guadalupe Co.
Population
Annual
Change
Market Area
Percent
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
167,044
174,026
181,008
187,990
194,972
201,954
209,990
218,025
226,061
234,096
242,132
251,315
260,498
269,680
278,863
288,046
298,344
308,642
318,939
329,237
339,535
350,687
361,839
372,991
…..
6,982
6,982
6,982
6,982
6,982
8,036
8,036
8,036
8,036
8,036
9,183
9,183
9,183
9,183
9,183
10,298
10,298
10,298
10,298
10,298
11,152
11,152
11,152
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
32.5%
Market Area
Market Area
Total
Population
Household Size Households
Forecast
54,206
56,475
58,745
61,015
63,285
65,555
68,168
70,781
73,395
76,008
78,622
81,609
84,597
87,584
90,573
93,561
96,912
100,264
103,616
106,968
110,321
113,951
117,583
121,222
2.70
2.69
2.69
2.69
2.69
2.69
2.69
2.69
2.69
2.68
2.68
2.68
2.68
2.68
2.68
2.68
2.67
2.67
2.67
2.67
2.67
2.67
2.67
2.66
20,104
20,957
21,810
22,665
23,520
24,377
25,361
26,347
27,334
28,322
29,312
30,441
31,572
32,704
33,838
34,972
36,244
37,517
38,792
40,068
41,345
42,728
44,113
45,502
Annual
Additions
…..
853
854
855
856
857
985
986
987
988
989
1,129
1,131
1,132
1,133
1,135
1,272
1,273
1,275
1,276
1,278
1,383
1,385
1,389
Prepared by: Capitol Market Research, June 2009
Notes: 2000 - 2009 market area households based on residential building permits and 2000 US Census data
Projections based on Texas State Data Center, February 2009 (scenario 1.0)
Market area capture rate based on 1990 - 2000 growth trend, and recent building permit activity
Household size based on 2000 US Census for market area trended downward based upon change in
average San Antonio MSA household size 1990-2000 (-1.4%)
poptrend permits.xls
8
San Antonio Retail Market Conditions
Retail Market Overview
The San Antonio multi-tenant retail market has shifted away from the traditional location and
concentration of retail space in neighborhood shopping centers and large regional malls to a more diverse
base that includes “power centers,” “super centers,” and off-price shopping. Approximately 9.56 million
square feet of multi-tenant space have been added to the citywide inventory since 2000, an increase of
31.5%, and much of that space has been located in the FM 1604 corridor on the north side of the city.
Gross retail sales for the San Antonio MSA increased dramatically from 1995 to 2000, growing a total of
41.2% 1995 to 2000. With the economic downturn in 2001, gross retail sales dropped, and in 2001, grew
only 5.3%. Sales increased in 2002 by 13.5% with $18.4 million in gross retail sales. However, in 2003,
the same year that the San Antonio MSA report negative job growth, gross retail sales increased only
0.9% over the previous year. Then, beginning in 2004, the market recovered quickly, and in 2007 Gross
Retail sales exceeded $26 billion, a 42.5% increase over 2003 and a 71% increase over 2000.
The combination of rapid population growth and increases in disposable income has created a healthy
demand for retail space in the San Antonio area. In addition, the national trend toward replacement of
neighborhood retail stores and malls with “big box” outlet stores and “lifestyle centers” has generated a
demand for new construction, even during the late eighties, and in 2001 and 2002 when the San Antonio
economy was stagnant and there was little population growth.
San Antonio has experienced a considerable improvement and expansion of the retail market over the
last ten years. In the mid-nineties, the multi-tenant retail market contained approximately 28.1 million
square feet of space, and average rents were only $8.32 per square foot. Occupancy rates were slightly
lower than today, at 85% with generally higher rates and occupancy at the anchored centers. Over the
last ten years, absorption has been driven by the completion of new shopping centers, like The Quarry,
The Forum and The Shops at La Cantera. These centers typically open with substantial preleasing and
high occupancy rates while older centers struggle to maintain their tenants, even at substantially lower
rental rates. The continued expansion of population and employment, coupled with the yearly influx of
tourists to the many attractions in the area have fostered the growth in retail space by over 9.5 million sq.
ft. since 2000.
The recent opening of The Shops at La Cantera and the opening of the 200,000 sq. ft. Bass Pro Shops at
The Rim have continued the northward expansion of retail in the region while a number of smaller centers
are planned to serve the growing household base along Loop 1604 and north, on US Hwy 281.
Current Market Conditions
Citywide occupancy declined somewhat, reflecting the turbulence in the national economy and among
major retail chain stores. The occupancy dropped almost 2% from 88.9% in December 2007 to 86.8% in
December 2008. Average rents, however, increased by $1.02 per square foot from $17.09 in December
2007 to a citywide record high of $18.11 per square foot in December 2008. In San Antonio, the market
remains relatively strong with the expansion of power centers, large community “super centers,” new
“lifestyle centers” and a growing trend of demolition and renovation.
The December 2008 inventory of multi-tenant retail space in the San Antonio area included 43.2 million
square feet evenly distributed among the four major types of retail centers. The regional malls, which
include Alamo Quarry Market, Bandera Pointe, Ingram Park Mall, North Star Mall, Rolling Oaks Mall,
South Park Mall, The Forum at Olympia Parkway, Westlakes Mall and Windsor Park Mall, account for
more than 7.12 million square feet of retail space. Community and power centers (by definition) include at
least one junior department or discount store and are concentrated on Loop 1604, IH-10, Loop 410 and
9
US Hwy 281. Neighborhood centers, usually anchored by a grocery store/drugstore combination, are
distributed throughout the city among the various residential subdivisions. Strip centers, which generally
have no “anchor” tenant, are found along every major thoroughfare in the city and surrounding suburban
residential markets.
Table (6)
Gross Retail Sales
San Antonio MSA 1995 - 2008*
Year
Gross Retail Sales
Annual Change
Percent
Change
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008*
$10,927,992,064
$11,646,984,702
$12,262,180,140
$13,039,249,594
$14,403,973,558
$15,433,381,348
$16,248,170,029
$18,439,983,687
$18,598,058,225
$20,089,582,414
$22,879,294,009
$24,718,571,997
$26,278,850,587
$27,652,100,831
n.a
$718,992,638
$615,195,438
$777,069,454
$1,364,723,964
$1,029,407,790
$814,788,681
$2,191,813,658
$158,074,538
$1,491,524,189
$2,789,711,595
$1,839,277,988
$1,560,278,590
$1,373,250,244
n.a
6.6%
5.3%
6.3%
10.5%
7.1%
5.3%
13.5%
0.9%
8.0%
13.9%
8.0%
6.3%
5.2%
Source: Texas Comptroller of Public Accounts
Quarterly Sates Tax Report, San Antonio MSA-Retail Trade
*1q - 3q 2008 actual, 4q estimated
SA Retail Sales.xls
10
Table (7)
Retail Market Summary
San Antonio: 2000 - 2008
Date
Total SF
Occupied SF
Percent
Occupied
SF
Additions
Absorption
Average
Rent
2000
30,359,298
26,351,871
86.8%
…
428,762
$13.20
2001
31,964,059
27,553,019
86.2%
1,604,761
103,261
$13.35
2002
32,562,520
28,329,392
87.0%
598,461
438,921
$13.71
2003
33,370,027
28,831,703
86.4%
807,507
767,901
$14.05
2004
33,878,198
29,507,910
87.1%
508,171
1,246,329
$14.75
2005
35,908,047
32,103,320
89.4%
2,029,849
2,186,590
$15.48
2006
37,611,249
33,786,603
89.8%
1,703,202
1,792,619
$16.51
2007
2008
39,096,769
43,191,712
34,764,879
37,489,898
88.9%
86.8%
1,485,520
4,094,943
1,112,039
2,675,628
$17.09
$18.11
Source: NAI REOC Partners, Ltd.
retail_sum.xls
Retail Historical Rent & Occupancy
$19.00
100.0%
98.0%
96.0%
94.0%
92.0%
90.0%
88.0%
86.0%
84.0%
82.0%
80.0%
$18.00
Rent per SF
$17.00
$16.00
$15.00
$14.00
$13.00
$12.00
$11.00
$10.00
2000 2001 2002 2003 2004 2005 2006 2007 2008
Average Rent
Percent Occupied
11
Percent Occupied
2000 - 2008
New Braunfels Retail Market Conditions
Overview
In April 2009, Capitol Market Research surveyed 12 existing multi-tenant shopping centers in the New
Braunfels market area with a total of 1,251,185 square feet of net rentable area. Currently, the market
area occupancy is 89.8%. Average rents are $16.07 per square foot per year (triple net). Community
centers are quoting average rates of $15.94 per square foot. Neighborhood centers have a higher
average rate of $18.72 per square foot due to the high ($20.00) rate quoted at the HEB Center. Strip
centers quote the lowest average rent of $13.44 per square foot.
New Construction
Town Center at Creekside is the newest addition to the New Braunfels retail market. With 270,000 sq. ft.
completed in 2009, it is the largest shopping center in the city. Planned additions to the center will
eventually take it to 825,000 sq. ft.. In addition, there have been three small retail centers built in the New
Braunfels market area since 2000, adding a total of 79,516 sq. ft. Three of the 12 retail centers in this
market area, comprising 307,651 sq. ft. and 32.9% of the net rentable area, were completed in the 1990s.
Courtyard Plaza is a community center with 190,429 sq. ft. It was built in 1990 and is anchored by a
Hobby Lobby, Big Lots and Family Dollar. This center is 89.0% occupied and rents average $12.00 per
sq. ft. The HEB Center, a 97,222-sq. ft. grocery-anchored neighborhood center on Walnut Ave., is fully
occupied and is achieving an average rental rate of $20.00, which is 24% above the market average.
Occupancy & Absorption
The market area occupancy in April 2009 is 89.8%, which is down from 95.4% in October 2007. It should
be noted, however, that 23,000 sq. ft. is located in Town Center (still in lease-up) and 60,000 sq. ft. is in
Unicorn Plaza which recently lost their major anchor. According to brokers active in the New Braunfels
market, occupancy rates have hovered around 90% over the last few years, but absorption has been
relatively low (until recently) due to the lack of significant new construction to drive the market absorption.
With the completion of 270,000 sq. ft. in the Town Center project, the market has absorbed 231,877 sq. ft.
since October 2007.
Average Rents
Average rents in the New Braunfels market have increased due in large measure to the substantially
higher rates quoted at Town Center at Creekside ($24.00 per sq. ft.). The HEB Center, which was built in
1994, has also out-performed the market, achieving higher average rents ($20.00) and maintaining higher
than average occupancy (100.0%).
Market Outlook
The relatively high occupancy rates and strong population growth in this market area have created a
strong opportunity for new retail development, particularly at the north end of town. Currently there are
three large projects planned at the intersection of FM 306 and IH-35 due to the strong growth in the north
part of town and the lack of sufficient retail services. The Town Center at Creekside has secured Target,
Best Buy and J.C. Penny as anchor tenants, and construction continues for this 825,000 sq. ft. power
center. When fully built out, the Town Center is expected to have more than 1 million sq. ft. of retail in the
power center and adjacent life style development. Surecap is planning to develop 400,000 sq. ft. of retail
on the southeast corner of IH-35 and FM 306, just south of the Town Center at Creekside. Surecap is in
negotiations with major retail tenants for the project, which will include at least one major anchor along
with junior anchors and pad sites. The third project planned in the IH-35 and FM 306 intersection is a
250,000 HEB Plus store to be located on the northwest corner of the intersection. A second and smaller
HEB store is also planned for the northwest corner of SH 337 and Highway 46 in the growing northwest
sector of New Braunfels.
12
Table (8)
New Braunfels Market Area Retail Summary
April 2009
Map
No.
Property Name
Address
Type
YOC
NRA
Leased
Vacant
% Occ
Low $
High $
Treatment
Expenses
Anchor Tenants
S
2004
26,084
24,884
1,200
95.4%
$15.00
$15.00
NNN
$2.40
Spare Pair
1
Common Market
1308-1312 E Common St.
2
County Plaza
1928 S Seguin Ave
S
1998
20,000
4,238
15,762
21.2%
$12.00
$12.00
NNN
$3.12
Jim's Video, Ballet New Braunfels
3
Courtyard Plaza
101 IH 35 S
C
1990
190,429
175,429
15,000
92.1%
$13.00
$13.00
NNN
$2.06
Hobby Lobby, Big Lots, Family Dollar
4
Freiheit Center
1050 I-35 E
N
1997
33,976
29,176
4,800
85.9%
$17.00
$17.00
NNN
$3.00
Walmart, Office Depot, Kohls
5
HEB Center
651 S. Walnut St.
N
1994
96,952
96,952
0
100.0%
$20.00
$20.00
NNN
$3.60
HEB, Papa John's Pizza, Dentist
6
Landa Plaza
347 Landa St
S
1975
23,000
20,500
2,500
89.1%
$10.00
$10.00
NNN
$2.50
Landa Pharmacy
7
Marketplace
651 N Business 35
C
1984
271,417
271,417
0
100.0%
$12.00
$16.00
NNN
$4.07
Westpoint Stevens, Texas Cinema
8
The Oaks
1551 N Walnut Ave.
S
2003
33,432
30,082
3,350
90.0%
$13.80
$13.80
NNN
$3.60
CG's Salon & Spa, TexSpecs, City Cleaners
9
Town Center @ Creekside
I-35 and Loop 306
C
2009
270,000
247,000
23,000
91.5%
$25.00
$25.00
NNN
$5.50
Super Target, Best Buy, JCPenny
10
Unicorn Plaza
601-605 I-35
N
1987
66,595
6,284
60,311
9.4%
$4.00
$10.00
NNN
$1.50
n.a.
11
Walnut Square
604-642 S. Walnut
C
1974
210,000
210,000
0
100.0%
$8.50
$12.00
NNN
$3.25
Payless, Chase, Target (Vacant)
12
Westview Plaza
2345 Loop 337
S
2007
9,300
8,100
1,200
87.1%
$16.75
$16.75
Gross
n.a
42,612
89.8%
Total/Average
1,251,185 1,124,062
Source: REOCK base data, Xceligent, Capitol Market Research Retail Survey, April 2009
$16.07
State Farm, Classy Canines
$3.15
retail centers.xls
13
New Braunfels Market Area
Existing Retail
´
Comal County
Downtown Study Area
0
0.5
1
Miles
FM
Loop 33
7
30
6
!
9
!
!
1
12
8
!
Landa
Bu
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6
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01
11
!
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7
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Ha
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!
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!!
11 5
§
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35
!
2
1. Common Market
2. County Plaza
3. Courtyard Plaza
4. Freheit Center
5. HEB Center
6. Landa Plaza
7. Marketplace
8. The Oaks
9. Town Center at Creekside
10. Unicorn Plaza
11. Walnut Square
12. Westview Plaza
c:\Projects\2009\New Braunfels Masterplan\existing_retail.mxd
n ty
Co u
Lin
e
Guadalupe County
Prepared by Capitol Market Research, May 2009
Planned Retail Projects
Within the New Braunfels primary market area (PMA), there is one new retail shopping center under
construction as of June 2009. In addition, as discussed earlier, there are four other planned shopping
centers in the New Braunfels Market Area. The project/site name, location, size and proposed timing of
all five projects are summarized in Table (9) below. It should be noted that the proposed completion dates
assume that the developer is successful in obtaining sufficient preleasing commitments to secure
construction financing. It is not likely that all of the planned projects will meet their preleasing thresholds
within the indicated time frame. In some instances, a large project may be developed in phases over
several years as the validity of the location is confirmed.
Table (9)
Planned Retail Projects
New Braunfels Market Area
Map No.
Project Name
Address
Size/Sq.Ft.
Status
Completion
Developer
1
Creekside South
SEC IH-35 and FM 306
400,000
planned
tbd
Surecap
2
HEB Plus
NWC IH-35 and FM 306
250,000
planned
tbd
HEB
3
Town Center at
Creekside
NEC IH-35 and FM 306
825,000
under
construction
2009
NewQuest
4
Westpointe Village
SWC SH 337 and Hwy 46
184,000
planned
2010
Barshop & Oles
250,000
feasibility
tbd
US Indigo
5
Word Borchers Ranch Loop 337 b/t River Rd. & Hwy. 46
1,909,000
Source: Capitol Market Research, June 2009, interviews with developers and City Planning staff
15
new development.xls
New Braunfels Market Area
Comal County
Planned Retail
Downtown Study Area
´
0
0.5
1
Miles
FM
!
2
30
6
7
Loop 33
!
!
3
1
!
5
!
Bu
sin
e
Landa
ss
I
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Un
-3
5
on
mm
Co
4
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An
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Hi
ll
FM
01
11
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gu
in
W
al
nu
t
Ha
ck
1. Creekside South
2. HEB Plus
3. Town Center at Creekside
4. Westpointe Village
5. Word Borchers Ranch
c:\Projects\2009\New Braunfels Masterplan\planned_retail.mxd
be
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35
L
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Cou
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Guadalupe
County
Prepared by Capitol Market Research, June 2009
Downtown New Braunfels Retail Market Conditions
Overview
In April 2009, Capitol Market Research surveyed 54 retail buildings in the New Braunfels Downtown
market area with a total of 300,554 square feet of designated retail space. Currently, the market area
occupancy is 92.5%. Rental rates quoted for available ground floor retail space range from $8.00 to
$12.00 per sq. ft. per year (triple net) which is substantially lower than the $16.07 average annual rate
quoted in shopping centers in New Braunfels.
New Construction
McAdoo’s Restaurant is the newest addition to the New Braunfels retail market. Originally the site of the
New Braunfels Post Office, this “adaptive reuse” has 6,603 sq. ft. of building space, which was completely
renovated in 2009. This renovation is the most recent in a continuing trend of adaptive reuse and
renovation of the older buildings in downtown into new restaurants, bars and retail stores like Willkommen
bike shop and Gabby B’s Boutique. The renovations of the Seekatz Opera House and the Brauntex as
well as the adaptive reuse of Kork Bar are other examples of this continuing trend.
Occupancy & Absorption
The market area occupancy in April 2009 is 92.5%. Since this is the first comprehensive retail inventory
conducted in downtown New Braunfels, it should be considered a benchmark for future occupancy and
absorption analysis.
Average Rents
Along San Antonio St., where a large portion of the retail centers in Downtown New Braunfels are
located, rents range from $0.75 per square foot at Gabby B’s Boutique to $1.00 per square foot for the
retail space at 168 W San Antonio, below Puffer Sweiven.
Market Outlook
The historic character of downtown and its cultural vitality give it an advantage in the competition for
consumers who are seeking a unique shopping experience. While downtown does offer a range of
services, there are gaps in the retail mix and some market segments that are not addressed at all.
Residents in downtown find some of their daily needs met in the area, but most will venture out of
downtown to make shopping trips for weekly staples and specialty items. Visitors to New Braunfels are
generally unaware of the shopping and dining opportunities that currently exist in downtown. Many
visitors know New Braunfels only as the location of the Schlitterbahn Water Park and the music hall and
river restaurant in Gruene. The strong nucleus of restaurants, bars and new retail establishments should
be expanded to make the downtown area a “specialty retail” destination. As the downtown becomes
better known as a place to go to, and not through, the number of retail establishments will expand and
retail sales and rents will increase.
Opportunity
Fill in gaps with more “specialty retail” shops that complement the existing specialty retail, dining and
entertainment venues.
17
Table (10)
Downtown New Braunfels Market Area Retail Lease Listings
June 2009
Map
No.
Property Name
Address
YOC
NRA
Leased
Vacant
% Occ
Low $
High $
Treatment Expenses
Anchor Tenants
1
168 W San Antonio
168 W San Antonio
1922
2,730
0
2,730
0.0%
$1.00
$1.00
NNN
$3.00
vacant space
2
264 W San Antonio
264 W San Antonio
1900
1,746
1,746
0
100.0%
$0.69
$0.69
NNN
$3.00
Gabby B's Boutique
3
270 W San Antonio
270 W San Antonio
1920
2,462
2,462
0
100.0%
$0.73
$0.73
NNN
$3.00
Willkommen Bike
4
301 W San Antonio
301 W San Antonio
1912
3,200
0
3,200
0.0%
$0.78
$0.78
NNN
$3.00
Huisache Retail
10,138
4,208
5,930
41.5%
Total/Average
Source: Capitol Market Research Retail Survey, June 2009
$0.80
$3.00
retail centers.xls
18
New Braunfels Market Area
Downtown Retail
ion
Un
´
Downtown Study Area
0
0.125
0.25
Miles
Landa
!2
3
!
ain
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Se
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Ma
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t
Ga
rd
e
n
Hil
l
Ac
ad
em
y
ss
ro
C
1. 168 W San Antonio St
2. 264 W San Antonio St
3. 270 W San Antonio St
4. 301 W San Antonio St
c:\Projects\2009\New Braunfels Masterplan\dt_retail.mxd
Gu
en
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Prepared by Capitol Market Research, June 2009
New Braunfels Primary Market Area Purchasing Power
Downtown New Braunfels is located in zip code 78130 within the New Braunfels Primary Market Area that
also include zip code 78132. This market area has one large community shopping center and several
smaller neighborhood retail centers anchored by HEB. In addition there are a number of buildings with
ground floor retail on San Antonio Street in Downtown New Braunfels. As shown below, the market area
(defined as zip codes 78130 and 78132) has a growing population base and above average income
levels, which result in rapidly growing household-based purchasing power. Since 2000, the number of
households in the market area has increased by 36.7%, based on the Claritas Marketplace Inc. estimate
that 7,389 additional households reside in the market area in 2009 when compared to 2000. Based on the
multi-family survey conducted by CMR for this analysis, six new multifamily communities with 793 units
have been completed since 2000. The remaining 6,596 additional occupied housing units may be the
result of new construction, conversion of industrial properties to residential use and/or the current
occupancy of previously vacant units. According to the 2000 census data, there were 1,911 vacant
housing units located in the market area.
The new households that have moved into the area to occupy the new homes and apartments have
added an estimated $723 million in additional household income to the market since 2000. Based on
these data, CMR estimates that at the end of 2008, there is approximately $1.418 billion in disposable
income among the estimated 26,672 households located in the subject market area, which includes New
Braunfels and suburban subdivisions to the north and west.
Table (11)
Current Purchasing Power
New Braunfels Primary Market Area (zip codes 78130 & 78132)
Year
Market Area
Households
Average HH
Income
Total HH Income
Total Disposable
Income
Estimated Retail
Purchases
Actual Retail
Purchases
2000
20,104
$52,543
$1,056,317,578
$841,885,110
$543,015,896
$419,497,323
2001
20,925
$55,225
$1,155,575,777
$920,993,895
$594,041,062
$425,782,542
2002
21,746
$56,322
$1,224,774,457
$976,145,242
$629,613,681
$430,374,311
2003
22,567
$61,564
$1,389,312,580
$1,107,282,126
$714,196,971
$438,349,346
2004
23,388
$62,783
$1,468,368,554
$1,170,289,738
$754,836,881
$466,195,319
2005
24,209
$62,783
$1,519,913,388
$1,211,370,971
$781,334,276
$506,244,570
2006
25,030
$64,734
$1,620,280,226
$1,291,363,340
$832,929,354
$662,025,513
2007
25,851
$65,465
$1,692,335,226
$1,348,791,175
$869,970,308
$819,889,078
2008
26,672
$66,726
$1,779,702,996
$1,418,423,288
$914,883,020
$827,472,561
Sources: (1) Household estimate based Claritas Marketplace 2009 estimates
(2) Average income based on HUD annual increases in Median HH Income for the San Antonio MSA
(3) Disposable income is assumed to be 79.7% of total, based on 2006 Consumer Expenditure Survey
(4) Retail purchases are estimated to be 64.5% of disposable income
20
Retail Demand.xls
Estimates of Purchasing Power
The previous sections have documented the current disposable income and have provided a growth trend
analysis for the retail market area based upon the documented construction of new homes and
apartments in the area since 2000. Using this historical information as a base and recognizing the growth
potential of the area based on land and utility availability, CMR has provided a forecast of anticipated new
population and household growth expected in the market area in Table (12). This housing forecast is then
combined with a forecast of household income to create a future income estimate for the retail market
area through 2023. Since a significant portion of total income is used for housing and transportation
expenses, only that portion for “Disposable Income” that is available for retail purchases is used to
estimate the demand for retail from area households, as shown below in Table (12).
Table (12)
Estimated Purchasing Power
Primary Market Area (Zip codes 78130 & 78132)
Year
Market Area
Households
Average HH
Income
Total HH Income
Total Disposable
Income
Estimated Retail
Purchases
2000
20,104
$52,543
$1,056,317,578
$841,885,110
$543,015,896
2001
20,925
$55,225
$1,155,575,777
$920,993,895
$594,041,062
2002
21,746
$56,322
$1,224,774,457
$976,145,242
$629,613,681
2003
22,567
$61,564
$1,389,312,580
$1,107,282,126
$714,196,971
2004
23,388
$62,783
$1,468,368,554
$1,170,289,738
$754,836,881
2005
24,209
$62,783
$1,519,913,388
$1,211,370,971
$781,334,276
2006
25,030
$64,734
$1,620,280,226
$1,291,363,340
$832,929,354
2007
25,851
$65,465
$1,692,335,226
$1,348,791,175
$869,970,308
2008
26,672
$66,726
$1,779,702,996
$1,418,423,288
$914,883,020
2009
28,322
$68,394
$1,937,075,756
$1,543,849,378
$995,782,849
2010
29,312
$70,103
$2,054,860,457
$1,637,723,784
$1,056,331,841
2011
30,441
$71,856
$2,187,391,912
$1,743,351,354
$1,124,461,623
2012
31,572
$73,652
$2,325,363,072
$1,853,314,369
$1,195,387,768
2013
32,704
$75,494
$2,468,965,682
$1,967,765,649
$1,269,208,844
2014
33,838
$77,381
$2,618,397,745
$2,086,863,002
$1,346,026,637
2015
34,972
$79,316
$2,773,863,712
$2,210,769,378
$1,425,946,249
2016
36,244
$81,299
$2,946,586,965
$2,348,429,811
$1,514,737,228
2017
37,517
$83,331
$3,126,337,077
$2,491,690,650
$1,607,140,470
2018
38,792
$85,414
$3,313,360,748
$2,640,748,516
$1,703,282,793
2019
40,068
$87,550
$3,507,912,709
$2,795,806,429
$1,803,295,147
2020
41,345
$89,738
$3,710,255,974
$2,957,074,011
$1,907,312,737
2021
42,728
$91,982
$3,930,235,323
$3,132,397,552
$2,020,396,421
2022
44,113
$94,281
$4,159,048,106
$3,314,761,341
$2,138,021,065
2023
45,502
$96,638
$4,397,283,718
$3,504,635,124
$2,260,489,655
Sources: (1) Household estimate based on new construction of housing in the mark et area
(2) Average income based on HUD annual increases in Median HH Income for the Austin MSA
(3) Disposable income is assumed to be 79.7% of total, based on 2006 Consumer Expenditure Survey
(4) Retail purchases are estimated to be 64.5% of disposable income
(5) Average HH income increase assumed to average 2.5% per year
21
retail demand.xls
Planned Retail Development
The 26,672 plus households that currently live in the New Braunfels market area have an estimated
$1.418 billion in disposable income and approximately 64.5% of that income is spent on retail purchases.
According to records obtained from the State Comptroller’s office and the US Bureau of Census, the
estimated demand for retail services in the market area exceeded actual sales by 13.3% in 2008, which
means that a percentage of the disposable income in the community is spent elsewhere. This income
“leakage” is due in large measure to the lack of sufficient retail services in the trade area, a situation that
has only recently been recognized, and is now being addressed by shopping center developers. In 2008,
the total demand for retail purchases was estimated to be $937 million, and an estimated $827 million
was spent within the trade area. The “leakage” of $110 million would support more than 377,000 square
feet of additional retail space within the New Braunfels trade area.
Currently there are three large projects planned at the intersection of FM 306 and IH-35 due to the strong
growth in the north part of town and the lack of sufficient retail services. The Town Center at Creekside
has secured Target, Barnes & Noble and J.C. Penny as anchor tenants, and construction is underway for
this 825,000 sq.ft. power center. When fully built out, the Town Center is expected to have more than 1
million sq.ft. of retail in the power center and adjacent life style development. Surecap is planning to
develop 400,000 sq.ft. of retail on the southeast corner of IH-35 and FM 306, just south of the Town
Center at Creekside. Surecap is in negotiations with major retail tenants for the project, which will include
at least one major anchor along with junior anchors and pad sites. The third project planned in the IH-35
and FM 306 intersection is a 250,000 HEB Plus store to be located on the northwest corner of the
intersection. A second and smaller HEB store is also planned for the northwest corner of SH 337 and
Highway 46 in the northwest side of New Braunfels.
22
Table (13)
Supply and Demand Comparison
New Braunfels Primary Market Area
Year
Estimated Retail
Actual Retail Sales
Purchases
"Leakage" in
Dollars
Estimated
Sales/SF
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$543,015,896
$594,041,062
$629,613,681
$714,196,971
$754,836,881
$781,334,276
$832,929,354
$869,970,308
$914,883,020
$995,782,849
$1,056,331,841
$1,124,461,623
$1,195,387,768
$1,269,208,844
$1,346,026,637
$1,425,946,249
$1,514,737,228
$1,607,140,470
$1,703,282,793
$1,803,295,147
$1,907,312,737
$2,020,396,421
$2,138,021,065
$2,260,489,655
$123,518,573
$168,258,520
$199,239,370
$275,847,625
$288,641,562
$275,089,706
$170,903,841
$50,081,230
$87,410,460
$143,486,111
$178,466,201
$220,260,015
$264,060,111
$309,941,357
$357,981,125
$408,259,372
$466,519,745
$527,476,462
$591,228,865
$657,879,601
$727,534,726
$805,225,069
$886,394,572
$971,314,367
$260
$260
$260
$260
$265
$272
$278
$285
$293
$300
$307
$315
$323
$331
$339
$348
$356
$365
$374
$384
$393
$403
$413
$424
$419,497,323
$425,782,542
$430,374,311
$438,349,346
$466,195,319
$506,244,570
$662,025,513
$819,889,078
$827,472,561
$852,296,737
$877,865,640
$904,201,609
$931,327,657
$959,267,487
$988,045,511
$1,017,686,877
$1,048,217,483
$1,079,664,007
$1,112,053,928
$1,145,415,545
$1,179,778,012
$1,215,171,352
$1,251,626,493
$1,289,175,288
Add. Demand for Total Retail Space Excess/Deficit in
Added
Sq. Ft.
Retail SF
475,071
647,148
766,305
1,060,952
1,089,213
1,012,755
613,844
175,492
298,829
478,569
580,720
699,234
817,836
936,524
1,055,299
1,174,161
1,308,994
1,443,933
1,578,976
1,714,125
1,849,379
1,996,943
2,144,626
2,292,770
0
0
0
0
0
0
0
0
0
270,000
270,000
734,000
734,000
1,009,000
1,009,000
1,009,000
1,009,000
1,009,000
1,009,000
1,009,000
1,009,000
1,009,000
1,009,000
1,009,000
475,071
647,148
766,305
1,060,952
1,089,213
1,012,755
613,844
175,492
298,829
208,569
310,720
(34,766)
83,836
(72,476)
46,299
165,161
299,994
434,933
569,976
705,125
840,379
987,943
1,135,626
1,283,770
Sources: (1) Retail Sales per square foot based on ICSC "The Score" , 2007 and the existing inventory of 1.4 million sq.ft. of mullti-tenant retail space
(2) Retail Sales assumed to increase at 3.0% per year
retail demand.xls
Planned Projects
New Braunels Primary Market Area
Project Name
Location
Size
Completion
Creekside South
SEC IH-35 and FM 306
400,000
tbd
HEB Plus
NWC IH-35 and FM 306
250,000
tbd
NEC IH-35 and FM 306
825,000
2009
SWC SH 337 and Hwy 46
184,000
2010
Loop 337 b/t River Rd. & Hwy. 46
250,000
tbd
Town Center at
Creekside
Westpointe
Village
Word Borchers
Ranch
Source: Capitol Market Research, June 2009, interviews with developers and City Planning staff
23
Planned
Additions
0
0
0
0
0
0
0
0
0
270,000
0
464,000
0
275,000
0
0
0
0
0
0
0
0
0
0
Table (14)
Downtown New Braunfels Retail Space Demand
Cumulative Retail Demand 2009 - 2023
Year
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Unmet Demand Planned Additions Additional Demand Estimated CBD CBD Demand for Cummulative Retail
For Retail Space
in Retail SF
for Space
Capture Rate
Retail SF
Demand
478,569
580,720
699,234
817,836
936,524
1,055,299
1,174,161
1,308,994
1,443,933
1,578,976
1,714,125
1,849,379
1,996,943
2,144,626
2,292,770
270,000
0
464,000
0
275,000
0
0
0
0
0
0
0
0
0
0
208,569
310,720
-34,766
83,836
-72,476
46,299
165,161
299,994
434,933
569,976
705,125
840,379
987,943
1,135,626
1,283,770
2.0%
2.1%
2.2%
2.3%
2.4%
2.5%
2.6%
2.7%
2.8%
2.9%
3.0%
3.1%
3.2%
3.3%
3.5%
4,171
6,525
(765)
1,928
(1,739)
1,157
4,294
8,100
12,178
16,529
21,154
26,052
31,614
37,476
44,932
4,171
10,697
9,932
11,860
10,120
11,278
15,572
23,672
35,850
52,379
73,533
99,585
131,199
168,675
213,607
Sources: Capitol Market Research, estimates of a competitive share capture rate of unmet retail demand, June 12, 2009
retail demand.xls
24
Multifamily Market Trends in the San Antonio MSA
Apartment Market Overview
Most rapidly growing regions are stimulated in large measure by growth in employment opportunities.
Historically, San Antonio has enjoyed a slow but steady expansion in employment until the economic
downturn in 2001, which lasted until the end of 2003. Since that time however, the economy has shown
signs of improvement with positive job growth of 8,636 in 2004, 21,927 in 2005 and a record high of
29,567 in 2006, which was helped in part by the opening of the new Toyota plant in San Antonio in
November 2006 (which employs approximately 2,000). Most recently, in 2007, positive job growth was
reported, but at lower rate than recent years, with the addition of 20,888 jobs, a 2.57% increase over
2006. Based on monthly 2008 employment growth figures, the area continues to experience an increase
in new job seekers and their families. Many of these new households will move into rental housing.
Based on the tenure split evident from the 2000 census data, approximately 19.5% of the new
households moving into the San Antonio MSA are renters, and many of these new tenants will want to
live in an apartment. Using an employment forecast obtained from Texas Perspectives along with the
2000 US Census employment to population ratio, CMR forecasted population growth through 2015.
Applying the average household size for the MSA as reported in the 2000 US Census to CMR’s
population forecast shows that there is an annual average demand for new rental housing of 6,374 units
per year from 2008 through 2018.
Current Market Conditions
Current building activity is keeping pace with this demand with the consequence being a fairly stable
apartment market with a 2008 year-end occupancy of 89.1% and rental rates at $0.83 per square foot for
all classifications of units. According to The San Antonio Multi-housing Trend Report produced by Austin
Investor Interests, 3,989 new apartment units (affordable and conventional) were added in 2005, 2,120
new units were added in 2006, 3,035 were added in 2007 and 2,771 new units were added by the end of
2008. Approximately 4,666 new units (affordable and conventional) were absorbed in 2005, 1,141 units
were absorbed in 2006, 1,891 units were absorbed in 2007 and, most recently, 833 units were absorbed
in 2008. According to the San Antonio Trends Report first quarter 2009 publication, 24 complexes, (both
affordable and conventional), totaling 6,694 units (a portion of which, 952 units, have already been
delivered), are under construction. This same report indicates that 1,493 units are in the planning stage
(architectural plans submitted to the City of San Antonio). However, most of these planned projects have
been put “on hold” due to the lack of construction financing for new multi-financing development.
There are currently more than 11,000 units in the development pipeline for San Antonio. However, only
1,493 units have been submitted to the city for approval and only one project with 252 units has been
approved and is scheduled to start this spring. Clearly the slowdown in the national economy and the
lack of financing has curtailed the prospects for development in San Antonio, in spite of its relatively
healthy economy and positive growth outlook.
25
Table (15)
San Antonio Citywide Apartment Market Summary
1997 - 1Q 2009
Date
Total Units
Occupied
Units
Percent
Occupied
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
93,445
94,533
97,026
100,929
104,548
106,113
108,018
109,385
113,374
115,494
118,529
121,300
122,272
85,969
88,057
90,255
92,878
95,826
97,396
98,877
99,547
104,213
105,354
107,245
108,078
108,150
92.0%
93.2%
93.0%
92.0%
91.7%
91.8%
91.5%
91.0%
91.9%
91.2%
90.5%
89.1%
88.5%
Source:
New
Absorption
Completions
…
1,088
2,493
3,903
3,619
1,565
1,905
1,367
3,989
2,120
3,035
2,771
972
Rent per
Sq. Ft.
…
2,088
2,198
2,623
2,948
1,570
1,481
670
4,666
1,141
1,891
833
71
$0.66
$0.68
$0.71
$0.72
$0.75
$0.77
$0.79
$0.80
$0.78
$0.80
$0.82
$0.83
$0.83
Austin Investor Interests San Antonio Market Surveys 1997-1Q 2009
Historical Additions & Absorption
5,000
95%
3,000
90%
2,000
1,000
0
85%
1997
1998
1999
2000
2001
New Completions
2002
2003
2004
Absorption
26
2005
2006
2007
2008
Percent Occupied
2009
Percent Occupied
Units Added
4,000
New Braunfels Apartment Market Conditions
Overview
According to an April 2009 market survey by Capitol Market Research, there are 19 apartment
communities in New Braunfels with a total of 2,373 units. Currently, the market area occupancy is 90.8%,
which is up slightly (2.5%) from December 2008 when it was 88.3%. However, there are currently two
properties in lease up, La Sierra and Landmark Lofts. The occupancy rate of stabilized properties is
91.8%. Average rents have declined slightly (2.2%) since 2008 from $0.94 to $0.92 in the first quarter of
2009. Of the 2,373 total units, 1,361 (57.4%) have been built (completed) since the beginning of 1998.
New Construction
New construction has accelerated recently in New Braunfels, with 793 new unit completions in six new
projects occurring almost every year over the last seven years. Among the “new” completions are several
class “A” market rate products, including Augusta at Gruene, Braunfels Place, Cotton Crossing,
Landmark Garden Homes, Landmark Lofts, Northwood, Vantage at New Braunfels and Westshore
Colony. In addition, La Sierra began leasing in the first quarter 2009 and has already leased over half of
the 63 units it has delivered. These new properties are leasing at average rental rates that are 9.8%
above the market average, while maintaining a lower than average occupancy rate at 81.1% (including
the two properties currently in lease up).
Currently, there are two new projects in “lease up”, one that is still under construction and one that has
not yet stabilized. La Sierra, a 152 unit project located on the east side of New Braunfels, near IH-35,
began construction in June 2008 and Landmark Lofts which has leased up rather slowly due to its unique
“loft” appearance and higher than average rental rates.
Occupancy
The market area occupancy in April 2009 was at 90.8%, up from the 88.3% posted at the end of 2008.
However, as mentioned above, the occupancy rate among the stabilized properties is currently 91.8%.
Historically, between 1997 and 2002, the market remained above 91.0% occupied. However, in 2003,
with 118 units at Cotton Crossing delivered to the market, occupancy dropped to 87.2%. Occupancy
remained below 90.0% until 2006 when it finally reached 92.0%. However, at the end of 2007, with the
addition of 110 units occupancy dropped again to 87.4%. Currently, the market area is 90.8% occupied.
It is important to point out that the market has absorbed 199 units in 2008 and 115 units so far in 2009.
Occupancy will likely rise again due to the city’s position as an emerging employment node in the San
Antonio region and the lack of competition from surrounding communities.
Average Rents
Average rents in the New Braunfels market area have been increasing steadily since at least 2000 when
they were $0.81 per sq. ft. Currently, average rents are $0.92, a 13.6% increase over a nine year period,
driven primarily by the completion of new, higher-quality product. As noted above, the new class “A”
product has generally out-performed the market, achieving higher rents while maintaining an occupancy
rate slightly below the market average.
Market Outlook
Consistently high demand for rental units coupled with a relatively slow pace of new unit completions will
allow occupancy rates to remain high. With the addition of The Landmark Lofts adaptive reuse project in
2007 and the completion and expected start of La Sierra and Sundance, the multifamily offerings in the
New Braunfels market area have expanded and their high average rental rates have set a new
benchmark for the New Braunfels market.
27
Table (16)
New Braunfels Market Area Apartment Summary
2000 - 2009*
Date
Total Units
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1,580
1,580
1,580
1,698
1,818
1,996
1,996
2,106
2,310
2,373
Occupied
Units
1,490
1,460
1,446
1,481
1,595
1,727
1,836
1,841
2,040
2,155
Percent
Occupied
94.3%
92.4%
91.5%
87.2%
87.7%
86.5%
92.0%
87.4%
88.3%
90.8%
New Units
Added
…
0
0
118
120
178
0
110
204
63
Calculated
Absorption
…
-30
-14
35
114
132
110
4
199
115
Rent per
Sq. Ft.
$0.81
$0.83
$0.82
$0.82
$0.82
$0.84
$0.87
$0.90
$0.94
$0.92
Source: Apartment Trends Historical Profile, Capitol Market Research Apartment Survey, April 2009
*2009 data as of 1q 2009
250
Historical Absorption, Occupancy and New Units
Added
100%
200
95%
90%
100
50
85%
0
80%
-50
2000
2001
2002
New Units Added
2003
2004
2005
Calculated Absorption
28
2006
2007
2008
Percent Occupied
2009
Percent Occupied
Number of Units
150
New Braunfels Market Area
Existing Apartments
Downtown Study Area
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1. Augusta at Gruene
2. Bavarian Manor
3. Braunfels Haus
4. Braunfels Place
5. Cotton Crossing
6. Grand Cypress
7. Gruenewood Villas
8. La Sierra
9. Landa
10. Landmark Lofts
... Landmark Gardens
11. Langtry Village
12. Laruel Heights
13. Northwood
14. River Park
15. Torrey Place
16. Vantage at New Braunfels
17. Village Circle
18. Vista Del Sol
19. Westshore Colony
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Prepared by Capitol Market Research, May 2009
Planned Apartment Projects
Within the New Braunfels market area there is currently one new apartment project under construction,
La Sierra at 520 FM 306. Sundance, a 152 unit project planned as part of a mixed use development at
2056 Sundance Parkway was scheduled to begin construction in March 2009, but the start date has been
postponed due to the lack of development financing. Another project that is poised to start construction is
the Estates of Stone Crossing. Originally planned to be 294 units, the current site plan shows only 256
units. The location at Loop 337 and Stone Creek Blvd. is located on a bluff overlooking a heavily wooded
canyon on the south side of New Braunfels.
In addition to the sites above, there are three master planned communities that have a multi-family
component in the plan. In Town Center at Creekside and Westpointe Village the retail development is the
initial component with multi-family considered as a future development phase. The Word Borchers Ranch
is also a long term development whose initial phases will be single family residential, to be followed in the
future by retail and multi-family development.
Table (17)
Planned Apartment Projects
New Braunfels Market Area
Map No.
Project Name
Address
Size/Sq.Ft.
Status
Completion
Developer
1
Estates of Stone
Crossing
Loop 337 West of Mission Hills
256
planned
2010
Larry Peel Co.
2
La Sierra
520 Fm 306
152
Under
Construction
2009
Vino T. Patel
3
Sundance Ph.I
2056 Sundance Parkway
280
planned
2010
Koontz
McCombs
…
Sundance Ph.II
2056 Sundance Parkway
240
planned
tbd
Koontz
McCombs
4
Town Center at
Creekside
NEC IH-35 and FM 306
500
available site
tbd
NewQuest
5
Westpointe Village
SWC SH 337 and Hwy 46
300
available site
tbd
Barshop & Oles
1,000
long term
available site
tbd
US Indigo
6
Word Borchers Ranch Loop 337 b/t River Rd. & Hwy. 46
2,728
Source: Capitol Market Research, June 2009, interviews with developers and City Planning staff
30
new development.xls
New Braunfels Market Area
Planned Apartments
´
Downtown Study Area
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1. Estates of Stone Crossing
2. La Sierra
3. Sundance
4. Town Center at Creekside
5. Westpointe Village
6. Word Borchers Ranch
c:\Projects\2009\New Braunfels Masterplan\planned_apts.mxd
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Guadalupe
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Prepared by Capitol Market Research, June 2009
Downtown New Braunfels Apartment Market Conditions
Overview
According to an April 2009 market survey by Capitol Market Research, there are two apartment
communities (Landmark Gardens and Landmark Lofts) in downtown New Braunfels with a total of 288
units. Currently, the market area occupancy is 85.4%, which is up 16.9% from December 2008 when it
was 68.5%. However, currently Landmark Lofts is still in lease-up. The occupancy rate of the stabilized
property is 88.8%. Average rents have declined (8.3%) since 2008 from $1.30 to $1.20 in the first quarter
of 2009.
New Construction
While the Landmark project is technically just outside of the downtown area, at 144 Landa Street, by
virtue of location, character and the tenant profile, it is clearly associated with the downtown market.
Unlike most of the new product in the market, the Landmark Gardens and Landmark Lofts are
characterized by extensive project and unit amenities that include extensive landscaping and outside
water features and an upgraded interior finish out. In addition, many of the tenants either work downtown
or they are “lifestyle” tenants who have chosen the Landmark project because of its unique character, its
location on the Comal River and the proximity to downtown.
Currently, there are no new projects under construction in the downtown market area.
Occupancy
The market area occupancy in April 2009 was at 85.4%, up from the 68.5% posted at the end of 2008.
However, as mentioned above, the occupancy rate among the stabilized properties is currently 88.8%.
Both the Gardens and the Lofts are new projects with Landmark Gardens leasing in 2005 and Landmark
Lofts in 2008. In 2005 when it first opened, Landmark Gardens had an occupancy rate of 26.8% and has
since increased to 88.8% in 2009. Landmark Lofts leased up to 46.4% in 2008 and is now at 80.0% as of
the first quarter of 2009.
Average Rents
Average rents in the New Braunfels market area have fluctuated over time, particularly in the past year as
Landmark Lofts adjusts its prices as it leases up. Currently, average rents are $1.30, a 15.0% increase
since the Gardens opened in 2005, driven primarily by the completion of the Lofts which have a higher
base rental rate.
Market Outlook
A recent visit with the manager at the Landmark project revealed a very diverse tenant base at the
Landmark properties. The tenants varied from retirees and empty nesters to young professional sales
people and managers who work in diverse locations all over Central Texas. A majority of the residents
who work are professionals (34%) or work in the service industry (16%). Incomes vary dramatically, but
the average household income in $75,000. The presence of many retirees and empty nesters along with
a significant “lifestyle” component suggest a ripe opportunity for more “infill” development in downtown
that is of high quality and unique character that would appeal to a discerning renter profile.
Opportunity
To convert and rezone an existing, underutilized building for multi-family use within the study area. In
addition, multi-family residential could be built in conjunction with ground floor retail space on one or more
of the opportunity sites identified in the study area.
32
Market Area and Subject Absorption Forecast
It is estimated that the primary market area will show an annual demand for new apartment units from
2009 through 2023 of approximately 328 units. Combining the current market conditions with the plans for
new unit construction developed in the previous section, an absorption analysis for the primary market
area and downtown can be developed and is shown in Table (18) below. The annual demand for the CBD
is estimated to be 20 units per year for 2009 through 2023 for a total of 348 units.
Table (18)
Primary Market Area & CBD Apartment Demand Forecast
2000 - 2023
Year
Total
Households
Annual
Change
Percent
Renter
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
20,104
20,957
21,810
22,665
23,520
24,377
25,361
26,347
27,334
28,322
29,312
30,441
31,572
32,704
33,838
34,972
36,244
37,517
38,792
40,068
41,345
42,728
44,113
45,502
…..
853
854
855
856
857
985
986
987
988
989
1,129
1,131
1,132
1,133
1,135
1,272
1,273
1,275
1,276
1,278
1,383
1,385
1,389
…..
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
28.7%
Renter
%
Households Apartment
…..
245
245
245
246
246
283
283
283
284
284
324
325
325
325
326
365
365
366
366
367
397
397
399
Apartment
Demand
…..
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
94.5%
…..
231
231
232
232
232
267
267
268
268
268
306
307
307
307
308
345
345
346
346
346
375
376
377
Prepared by: Capitol Market Research, June 2009
CBD
Capture
Rate
1.0%
1.4%
1.8%
2.1%
2.5%
2.9%
3.3%
3.6%
4.0%
4.3%
4.6%
4.9%
5.1%
5.4%
5.7%
6.0%
6.3%
6.6%
6.9%
7.1%
7.4%
7.7%
8.0%
CBD
Demand
Cummulative
Demand
…..
2
3
4
5
6
8
9
10
11
11
14
15
16
17
18
21
22
23
24
25
28
29
30
…..
2
5
10
14
20
28
37
46
57
69
83
97
113
130
148
168
190
213
236
261
289
318
348
poptrend permits.xls
Notes: Projections based on Texas State Data Center, February 2009 (scenario 1.0)
Market area percent renter is 28.7% from the 2000 census data.
Percent multi-family based on TAMU Real Estate Center building permit starts, 1990-2007
33
Office Market Trends in the San Antonio MSA
Office Market Overview
The office market in San Antonio has over the last 20 years, evolved from a relatively small market focused
on banking and financial services to a much larger and more diverse multi-tenant market. In addition to the
25.8 million sq. ft. of general purpose office space, San Antonio has 5.4 million sq. ft. of medical-tenant,
medical only office space in inventory.
Reflecting the traditional financial services focus of the office market in San Antonio, historically a majority of
the general purpose office space was concentrated in the downtown area. In recent years, however,
suburban office development has dominated the market since almost 100% of the space built during the
nineties was constructed in the suburban market. A majority of leasing activity also took place in the
suburbs, where new buildings were built along Loop 410 and Highway 281. The lower cost of suburban
space has been particularly attractive to companies in health care, information technology and
telecommunications.
Historical Market Trends
San Antonio, like many other cities in Texas, experienced an unprecedented boom in new office construction
in the early eighties. The deregulation of savings and loan operations and rapid job growth prompted the
construction of many speculative office buildings, then just as these buildings came on line, the oil business
collapsed, and financial services and telecommunications went into a steep decline. In the late eighties, there
were numerous foreclosures by lenders and bankruptcies among developers and the Resolution Trust
Corporation (RTC) took over the ownership of a significant number of San Antonio office buildings.
Then in the early nineties, the RTC inventory was purchased by individuals and institutions and the
economy began to make a slow recovery. In 1992 SBC Communications relocated to San Antonio and
the expansion of telecommunication companies, call centers and financial service companies took off. A
number of large companies like Valero, Clear Channel Communications, MCI and Time Warner built and
occupied their own buildings and a number of multi-tenant buildings were completed.
Speculative construction continued through 2000 and strong leasing activity and positive absorption
occurred through the end of the year. Then the dot.com bust and the events of 9-11 caused a dramatic
slowdown in the market, which continued through 2002 and 2003. Then in 2004 the renewed growth in
the telecommunications, financial services and health care pushed the occupancy rates and rent upward
and that trend continued in 2005 and 2006. Developers then responded to the improving market
conditions and started more than 1 million square feet of speculative space. In 2007 more than 600,000
sq. ft. was delivered but absorption slowed and the occupancy rate declined to 83.4% by year end.
Current Market Conditions
According to NAI REOC Partners, the San Antonio office market continued its expansion into the fourth
quarter of 2008 with the completion of 10 new buildings and 1 million sq. ft. of space bringing the total
additions in 2008 to 1,206,610 sq. ft.. However, the national economic slowdown and uncertainty in the
market has caused absorption to fall off from the rapid pace seen at this time last year. Absorption for the
year was 307,768. Rental rates have stabilized at $20.32 per square foot (gross) and there are 400,000
square feet of space currently under construction and planned for completion over the next six months.
34
Table (19)
Office Market Summary
San Antonio: 2000 - 2008
Net Rentable
Area
Date
Leased
Percent
Occupied
SF Additions
Absorption in
Net Sq. Ft.
Average Rent
per Sq. Ft.
2000
21,686,265
19,102,503
88.1%
475,500
780,871
$17.52
2001
21,994,470
18,895,737
85.9%
405,500
(276,036)
$17.86
2002
22,189,573
18,463,466
83.2%
123,000
(466,269)
$17.69
2003
22,267,483
18,319,981
82.3%
58,000
(190,171)
$17.61
2004
22,941,224
18,830,465
82.1%
567,000
487,050
$17.76
2005
23,006,576
19,328,816
84.0%
251,000
359,617
$17.98
2006
23,741,870
20,464,454
86.2%
258,000
812,367
$18.65
2007
23,949,541
20,811,386
86.9%
631,000
432,449
$19.82
2008
25,816,851
21,414,231
82.9%
1,206,610
307,768
$20.32
Source:
NAI REOC Partners San Antonio Area Office Survey, 2000 - 2008
Average quoted rent for all available space on a "Gross" Lease basis
off_sum.xls
Historical Absorption and New Completions
1,400,000
100%
1,200,000
95%
1,000,000
800,000
Square Foot
600,000
400,000
85%
200,000
80%
0
(200,000)
75%
(400,000)
70%
(600,000)
New Completions
Calculated Absorption
35
Percent Occupied
Percent Occupied
90%
Office Market Trends in the New Braunfels Market Area
Office Market Overview
Based on a survey conducted by Capitol Market Research in May 2009, there is approximately 250,805
square feet of multi-tenant office space in New Braunfels located in 11 buildings. Currently the overall
market occupancy rate is 89.0% and rents average $15.65 per square foot on a gross lease basis. The
buildings are located primarily in three locations; in downtown, on E. Common St. and in the IH-35 corridor.
New Construction
A majority of the new office space construction in New Braunfels has been focused on E. Common Street,
near the Christus Santa Rosa Hospital. The hospital has spawned medical/professional office lease space
and office condominiums, which in turn has drawn general purpose office tenants who are attracted to the
high quality of development in the area and complimentary professional tenants. The only Class “A” office
building in the city, Rush Plaza, is located on IH-35 and was completed in 1985. There has been no new
office development in downtown since the First State Bank was completed in 1986.
Occupancy and Absorption
Current occupancy among the eleven surveyed office buildings is 89.0%. Absorption is difficult to estimate
without a periodic update, but 100,903 square feet of office space has been built and occupied since 2000
(an average of 11,211 sq. ft. per year).
The New Braunfels EDC has surveyed the same buildings shown on the CMR list since 2004 and the actual
change in “calculated” occupancy from 2004 to 2008 was 157,874 square feet. This change in occupancy
results in a four year average annual absorption estimate of 39,469 sq. ft.. This figure is probably closer to
the annual demand for space than the estimate based solely on the date of completion.
Average Rents
Average rents generally range from $13.80 per square foot for an office suite on E. Common Street to $19.20
per square foot in Rush Plaza on IH-35. The market average is $15.65 gross (expenses are estimated to
average $4.17 per sq. ft.).
Market Outlook
The multi-tenant office market in New Braunfels is slowly maturing as the city grows and the demand for
professional services increases. Generally, small towns have professional services located in free standing
(often owner occupied) buildings along major commercial streets and thoroughfares. As the community
grows and the demand for services increases, new companies will typically lease space before purchasing a
building or contracting for a “built-to-suit”.
The recent growth in New Braunfels has created an emerging demand for multi-tenant office space, and the
future growth in the community is expected to accelerate this trend. Currently there are no new office
buildings under construction but there is a second phase of the Common Street professional building (45,000
sq. ft.) planned.
36
Table (20)
New Braunfels Market Area Office Summary
May 2009
Map
No.
Property Name
Address
YOC
NRA
Leased
Vacant
% Occ
Low $
High $
Treatment
Expenses
Comments
1
712 N Houston Ave
712 N Houston
1985
3,230
1,580
1,650
48.9%
$15.60
$15.60
Gross
n.a.
2
Chase Bank Bldg.
111 W. San Antonio St.
1985
41,113
29,464
11,649
71.7%
$16.50
$16.50
Gross
n.a.
3
Common Central Park
1528 E. Common St.
2004
28,139
22,773
5,366
80.9%
$13.80
$13.80
NNN
$3.60
4
Common Plaza I
1920 E. Common St.
2006
7,490
7,490
0
100.0%
n.a.
n.a.
NNN
n.a.
2,000 SF coming up this summer
5
Common St. Prof. Bldg.
1583 E. Common St.
2000
32,000
31,400
600
98.1%
$18.00
$18.00
NNN
$6.00
45,000 SF new building planned
6
Hunter's Creek Center
1847 Highway 46
2002
14,700
14,700
0
100.0%
$14.40
$14.40
NNN
$3.00
2,000 SF coming up this summer
7
Rush Plaza
555 IH-35
1986
79,214
76,099
3,115
96.1%
$19.20
$19.20
Gross
n.a.
8
Seele Plaza
1040 N. Walnut
1964
11,574
11,574
0
100.0%
n.a.
n.a.
Gross
n.a.
9
Summitt Ctr. Exc. Office
2405 S. IH-35
1984
4,200
3,668
532
87.3%
$8.42
$19.28
Gross
n.a.
individual office suites
10
Walnut Place Prof. Office 1423 N. Walnut
2000
7,000
7,000
0
100.0%
$14.40
$14.40
NNN
$4.08
2,450 SF available in August 2009
11
Wells Fargo Bank Bldg.
2005
22,145
17,540
4,605
79.2%
$16.00
$16.00
Gross
n.a.
250,805
223,288
27,517
89.0%
Total/Average
1000 N. Walnut
Source: New Braunfels Chamber of Commerce, Xceligent, Capitol Market Research Office Survey, May 2009
$15.65
$4.17
office buildings.xls
37
New Braunfels Market Area
m
Existing Office
´
Riv
er
8.4 miles Northwest
Downtown Study Area
0
1
2
Miles
!6
!4
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on
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46
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1. 712 N Houston Ave
2. Chase Bank Building
3. Common Central Park
4. Common Plaza I
5. Common St. Professional Building
6. Hunter's Creek Center
7. Rush Plaza
8. Seele Plaza
9. Summitt Center Executive Office
10. Walnut Place Professional Office
11. Wells Fargo Bank Building
C:\Projects\2009\New Braunfels Masterplan\existing_office.mxd
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35
Guadalupe County
Prepared by Capitol Market Research, May 2009
Downtown New Braunfels Office Market Conditions
Overview
According to an April 2009 survey by Capitol Market Research, there is approximately 292,978 sq. ft. of
office space in downtown New Braunfels including the County Courthouse and Courthouse annex.
Currently, the market area occupancy is 80.9%, which is substantially lower than the rest of the market,
which was 89.0% occupied in April 2009. The higher than average vacancy rate is partially due to the
inclusion of all of the second floor space in the two story buildings on San Antonio Street.
New Construction
As noted earlier there has been no new office building completed in Downtown New Braunfels since First
State Bank was completed in 1986. Several existing homes or retail buildings have been purchased and
converted to office use and while this does not qualify as “new” construction, it does expand the office
space inventory and increases office employment in downtown.
Occupancy & Absorption
The market area occupancy in April 2009 is 80.9%. The current occupancy includes 12,022 sq. ft. of
“unfinished” second floor space which could be finished out as office. If that potential space is excluded,
the downtown office occupancy rate increases to 84.6%.
Average Rents
Rents range from $12.72 per square foot (per year) at the Jahn Building at 494 S Seguin Ave. to $26.64
per square foot at 388 W Comal Avenue. In contract to the retail lease space, the quoted lease rates for
office in the CBD are more comparable to lease rates in other parts of the city at $17.72 per square foot.
Market Outlook
A majority of the office employment opportunities in downtown are provided by the public sector in the
City and County government offices. New Braunfels Utilities (NBU) also has their main office in
downtown, at the northeast corner of the main square. Several banks have their offices downtown and
attorneys, particularly those with a courthouse practice, are well represented in the area. There are also
a number of real estate offices and other professional service companies.
The vacant second floor space in several downtown buildings seems ripe for conversion to office use.
Recent advances in multiple office network connectivity make “back office” uses a potential market niche,
and small technology oriented businesses could also be attracted by the historic character of the
downtown buildings. However, the electrical and telecommunication wiring for technology driven
business far exceed the early 20th century service available in most second floor spaces. Also, the fire
code requirement for a second means of egress is a physical and financial obstacle for office uses on the
second floor. In many cases, the retrofit of existing buildings is possible, but building owners or tenants
may need financial assistance or tax breaks to make the necessary upgrades economically viable.
Opportunity
There are several historic buildings with vacant second floor space on San Antonio Street that could be
converted to office use. The conversion of this space would add more tenants to the downtown
employment base, which would provide more customers for the retail uses and eventually encourage
further office space construction within the study area.
39
Table (21)
Downtown New Braunfels Market Area Office Lease Listings
June 2009
Map
No.
Property Name
Address
YOC
NRA
Leased
Vacant
% Occ
Low $
High $
Expense
Expenses
Treatment
1
Jahn Building
494 S Seguin Ave.
1907
7,820
4992
2,828
63.8%
$12.84
$12.84
Gross
n.a.
2
Rahe/Wright Building
156 S. Seguin Ave.
1937
5,828
4,028
1,800
69.1%
$12.72
$12.72
Gross
n.a.
3
190 S Seguin Ave.
190 S Seguin Ave.
1848
5,259
4,747
512
90.3%
$23.16
$25.20
Gross
n.a.
4
Chase Bank Building
111 W San Antonio St.
1967
41,113
29,464
11,649
71.7%
$16.50
$16.50
Gross
n.a.
5
388 Comal Ave.
388 Comal Ave.
1886
1,312
1,087
225
82.9%
$26.64
$26.64
Gross
n.a.
6
142 W Zink St.
142 W Zink St.
1923
784
0
784
0.0%
$17.52
$17.52
Gross
n.a.
7
392 W Mill St.
392 W Mill St.
1896
2,055
0
2,055
0.0%
$16.32
$16.32
Gross
n.a.
8
180 W Mill St.
180 W Mill St.
1962
3,500
0
3,500
0.0%
$15.00
$15.00
Gross
n.a.
67,671
44,318
23,353
65.5%
Total/Average
Source: Capitol Market Research Retail Survey, June 2009
$17.72
n.a.
office centers.xls
40
Office Space Demand
Total employment in the San Antonio area is expected to grow by more than 31.5% in the next 12 years with
Financial Activities, Professional and Business Services, Education and Healthcare having the highest
percentage growth rates. Due to the evolving nature of the industrial mix, in order to accurately reflect the
number of office jobs created, it is important to examine the types of jobs being created by occupational
category. Office type occupations are broadly defined as all white-collar occupations minus the category of
sales workers. Included in this classification are most professional, managerial and clerical categories as
defined by the US Bureau of Census. There are, however, a number of occupations that do not occupy office
space and must therefore be deleted to accurately reflect the demand for office space. Among the deleted
categories are artists, musicians, pharmacists and elementary school teachers. Other categories may be
partially deleted based on empirical evidence and judgment based on local market knowledge.
Once the number of office jobs by industry group has been determined, it is then necessary to estimate the
number of jobs that are located in office buildings rather than in industrial warehouse space or in an office
attached to a manufacturing facility. This is accomplished by developing a matrix of office occupations by
major industry group and including only those jobs that are likely to be located in freestanding office buildings.
The final step is determining the proportion of office demand that is likely to be absorbed in multi-tenant office
buildings. In recent years a significant percentage of office demand has been accommodated in build-to-suit
office buildings like Valero, Time Warner Cable, Clear Channel Communications and Bank of America. It is
likely that this trend will shift toward the multi-tenant market as a substantial amount of new office space is
now available, and the desire to move rapidly into already completed and relatively affordable space drives
the decision-making in many companies.
As a part of this office study, Capitol Market Research obtained from the Texas Workforce Commission an
occupational breakdown of workers for each major industry group. CMR staff then reviewed each
occupational category and assigned it an office percentage based on the likely location of the worker within
each industry class. The results of this classification analysis indicate that currently 38.5% of all wage and
salary workers in the San Antonio area are located in office space, however, the estimates by industry group
range from a low of 4% in hospitality to 100% in Finance, Insurance and Real Estate.
By using the employment forecast obtained from Economy.com in February 2009 and calculating office
employment based on the evaluation of occupations discussed above, office employment is expected to
increase by approximately 94,787 workers between 2008 and 2020. Assuming an average ratio of 225 sq. ft.
per employee, this employment increase should result in a demand for 21.3 million sq. ft. of office space or
approximately 1.6 million square feet annually from 2008 to 2020. After the existing space is absorbed, (by
2011) the new office space built will be a mix of private and public, single tenant buildings and multi-tenant
lease space, with the multi-tenant space accounting for approximately 50% of the total (see Table 22).
41
Table (22)
Office Employment Growth
San Antonio MSA
Year
Total Wage &
Salary Emp.
Percent
Office
Employment
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
853,199
847,176
856,900
888,415
928,612
964,374
989,111
1,011,848
1,035,581
1,058,428
1,079,322
1,097,317
1,114,317
38.8%
38.5%
38.4%
38.2%
37.9%
37.7%
37.7%
37.7%
37.6%
37.6%
37.6%
37.6%
37.6%
Office
Employment
Annual
Change
Office Space
Absorption
Multi-Tenant
Space
Absorption
330,843
326,518
328,650
339,062
352,127
363,989
372,987
381,230
389,441
397,771
405,558
412,570
419,378
6,252
-4,325
2,133
10,411
13,065
11,862
8,998
8,243
8,211
8,330
7,787
7,012
6,808
1,406,701
-973,151
479,832
2,342,562
2,939,656
2,669,015
2,024,554
1,854,612
1,847,526
1,874,193
1,752,075
1,577,701
1,531,815
703,351
-486,575
239,916
1,171,281
1,469,828
1,334,508
1,012,277
927,306
923,763
937,096
876,038
788,850
765,908
94,787
21,327,092
10,663,546
Total
Source: Total Employment forecast from Economy.com, February, 2009
Office Employment is estimated to range from 37.6% to 38.8% of Total Employment
based on occupation survey conducted by Capitol Market Research
Employment to space ratio estimated to be 225 sq. ft. per person
Multi-tenant space estimated to be 50% of the total demand
42
office absorption.xls
Comal County and Downtown New Braunfels Absorption Forecast
Comal County has enjoyed a steady increase in employment over the last eight years, increasing from
30,137 jobs in 2000 to 38,951 jobs in 2008. The 28.5% growth in county employment was more than
twice as rapid as the growth rate in the San Antonio MSA (12.7%). Also as a percentage of the total,
Comal County increased its share of the MSA employment base from 4.1% in 2000 to 4.7% in 2008. It is
reasonable to assume that Comal County will continue to increase its share of regional employment and
therefore CMR has estimated that an increase in the share of employment and office absorption will take
place in the New Braunfels market area from 2009 to 2020 based on the historical average increase in
capture rate of 0.0415% per year from 2000 through 2008. CMR has also estimated a market area (CBD)
capture rate that increases from 2.0% in 2009 to 15.0% in 2020. Based on these assumptions, the
downtown market area absorption forecast was developed and is shown in Table (23) on the following
page.
Table (23)
Comal County Employment Growth
Year
Comal
County
Employment
Percent
Increase
San Antonio
MSA
Employment
Percent
Increase
% of MSA
2001
30,317
…..
741,411
…..
4.1%
2002
30,554
0.8%
741,068
0.0%
4.1%
2003
30,746
0.6%
742,250
0.2%
4.1%
2004
31,691
3.1%
749,256
0.9%
4.2%
2005
32,967
4.0%
767,811
2.5%
4.3%
2006
35,209
6.8%
798,777
4.0%
4.4%
2007
36,955
5.0%
819,962
2.7%
4.5%
2008
38,951
5.4%
835,894
1.9%
4.7%
Total Change
8,634
28.5%
94,483
12.7%
Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages, June 2009
comal county employment.xls
43
Table (24)
Office Space Absorption Forecast
Comal County and Downtown Market Area
Year
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
San Antonio MSA Comal County
Office Absorption
Percent
703,351
(486,575)
239,916
1,171,281
1,469,828
1,334,508
1,012,277
927,306
923,763
937,096
876,038
788,850
765,908
Comal County
Downtown Downtown office
Office Absorption Capture Rate
Absorption
4.7%
4.9%
5.1%
5.3%
5.5%
5.7%
5.9%
6.2%
6.5%
6.7%
7.0%
7.3%
7.6%
32,775
(23,614)
12,126
61,658
80,584
76,200
60,199
57,434
59,588
62,956
61,295
57,485
58,128
Total 2009 to 2020
624,039
Source: Capitol Market Research, June 2009
2.0%
2.1%
2.3%
2.4%
2.6%
2.7%
4.2%
5.8%
7.3%
8.9%
10.4%
11.9%
15.0%
655
(505)
276
1,492
2,063
2,057
2,551
3,317
4,357
5,572
6,367
6,855
8,719
43,122
office absorption.xls
44
Hotel Trends in the San Antonio Region
Hotel Market Overview
San Antonio has long been a favorite destination for family vacations and meeting planners. The warm
climate and wide array of tourist destinations have made the Tourism and Hospitality Industry a vital part
of the local economy. While Healthcare and Bioscience provide the largest economic impact in the
region, the Hospitality Industry ranks second, adding more than $9 billion dollars to the local economy
each year.
According to the most recent survey provided by PKF Consulting, at the end of 2008 there were a total of
244 hotels and 31,624 rooms in the San Antonio region. The occupancy rate for all of 2008 was 66.7% at
an average daily rate of $121.62.
New Construction
After several years of inactivity, hotel developers added 12 new hotels in 2007 and 8 in 2008, increasing
the number of rooms by 1,300 in just two years. Currently there are several new hotels under
construction, but the lack of development financing for most commercial development has had little effect
on the lodging industry and a significant number of hotels are currently under construction in the San
Antonio market.
Occupancy
Since 2003, hotel occupancy in the region has remained relatively stable at an average of 69.4%,
reflecting the overall strength of the hospitality industry in San Antonio. However, a more careful
examination of the occupancy shows a steady increase from 67.8% in 2003 to 72.8% in 2006, and a
decline since then to 66.7% in 2008.
Average Daily Rates
The average daily rate (ADR) for a hotel room in 2008 was $121.62 down slightly from $121.85 in
December 2007. Since 2003 the ADR has increased 37.9% from $88.18 in 2003 to $121.62 in 2008.
Market Outlook
The San Antonio market remains relatively strong but the national economic recession has curtailed both
business and leisure travel throughout the country. Bookings are down in 2009, reflecting the individual
and corporate belt-tightening, but the industry remains healthy and should bounce back as the national
economy gains strength.
45
Table (25)
Hotel Market Summary
San Antonio Market Area
Year
Number of Number of
hotels
Rooms
Rooms Occupancy
Occupied
Rate
Rooms Average
RevPAR
Added Daily Rate
2003
218
29,885
20,262
67.8%
…..
$88.18
$59.79
2004
225
30,503
21,017
68.9%
618
$86.43
$59.55
2005
226
30,053
21,849
72.7%
-450
$100.31
$72.93
2006
224
30,324
22,076
72.8%
271
$109.23
$79.52
2007
236
31,101
21,055
67.7%
777
$121.85
$82.49
2008
244
31,624
21,093
66.7%
523
$121.62
$81.12
Source: PFK Consulting & PFK Capital 2003 - 2008 Texas Trends Report
hist_occ_hotel.xls
Hotel Room Rates and Occupancy
$130.00
75.0%
$120.00
Room Rate
$100.00
65.0%
$90.00
$80.00
60.0%
$70.00
$60.00
55.0%
$50.00
$40.00
50.0%
Average Daily Rate
RevPAR
46
Occupancy Rate
Occupancy
70.0%
$110.00
Hotel Trends in New Braunfels
Overview
New Braunfels has long been a summer hot spot among vacationers and tourists. The city’s close
proximity to the Comal and Guadalupe rivers and Schlitterbahn Water Park have made the Hospitality
Industry an integral part of the local economy. German culture festivals such as Wurst Fest in October
and Wassailfest in December also attract tourists throughout the remaining parts of the year.
According to the most recent survey provided by PKF Consulting, at the end of 2008 there were a total of
28 hotels and 1,751 rooms in New Braunfels. The occupancy rate for all of 2008 was 61.4% at an
average daily rate of $78.59.
New Construction
After a couple years of inactivity, hotel developers added the Econo Lodge Inn & Suites in 2007 and
Sleep Inn & Suites in 2008 which together added a total of 107 rooms to the market in two years.
Currently there are six more hotels under construction in the market area, Courtyard by Marriott, Fairfield
Inn and Suites, Hampton Inn, Hilton Garden Inn, Microtel Inn & Suites and Wingate by Wyndham which
when complete, will add an additional 543 rooms.
Occupancy
From 2004 through 2008, hotel occupancy in the area has remained fairly stable at an average of 61.9%.
Occupancy steadily increased between 2003 and 2007 from 56.2% to 63.4% but recently declined 2
percentage points to 61.4% in 2008.
Average Daily Rates
The average daily rate (ADR) for a hotel room in New Braunfels was $78.59 in 2008, a notable increase
from $74.00 in December 2007. Since 2003 the ADR has increased 27.8% from $61.48 in 2003 to
$78.59 in 2008.
Market Outlook
The New Braunfels market remains stable but the national economic recession has curtailed both
business and leisure travel throughout the country, and it has had an effect on the bookings and
hospitality industry in New Braunfels.
47
Table (26)
Hotel Market Summary
New Braunfels
Year
Number of Number of
Hotels
Rooms
Rooms Occupancy
Occupied
Rate
Rooms Average
RevPAR
Added Daily Rate
2003
26
1,644
924
56.2%
…..
$61.48
$34.54
2004
26
1,644
1,003
61.0%
0
$58.66
$35.77
2005
26
1,644
1,006
61.2%
0
$69.58
$42.55
2006
26
1,644
1,024
62.3%
0
$76.44
$47.62
2007
27
1,694
1,074
63.4%
50
$74.00
$46.90
2008
28
1,751
1,075
61.4%
57
$78.59
$48.29
Source: PFK Consulting & PFK Capital 2003 - 2008 Texas Trends
hist_occ_hotel.xls
Hotel Room Rates and Occupancy
75.0%
$110.00
$100.00
70.0%
$80.00
65.0%
$70.00
60.0%
$60.00
$50.00
55.0%
$40.00
$30.00
50.0%
Average Daily Rate
RevPAR
48
Occupancy Rate
Occupancy
Room Rate
$90.00
Hotel Trends in Downtown New Braunfels
Overview
Although New Braunfels has long been a summer hot spot among vacationers and tourists, downtown
New Braunfels draws in a smaller crowd of overnight visitors. While downtown is close to the Comal River
and Schlitterbahn Water Park and it is the site of several German culture festivals, the area has only two
relatively small historic hotels with a total of 75 rooms.
New Construction
There has been no new construction within downtown New Braunfels since 1929 when the Faust Hotel
was completed.
Occupancy
Occupancy data for the two downtown hotels is not available due to “disclosure” requirements.
Average Daily Rates
The “quoted” rates at the Prince Solms Inn range from $125 for a room accommodating up to two people
a night to $195 for the Klein Haus Cottage and Carriage Haus which can accommodate up to 5 people a
night. At the Faust Hotel, the quoted room rate ranges from $89 for a single bed during a weekday to
$250 for the Executive Suite on a weekend day.
Market Outlook
The New Braunfels market remains stable but the national economic recession has curtailed both
business and leisure travel throughout the country, and it has had an effect on the bookings and
hospitality industry in New Braunfels.
The relatively high occupancy and room rates in the New Braunfels market and strong growth throughout
the community have encouraged the construction of six new hotels. However, a majority of the existing
hotel rooms are in relatively modest economy and extended stay hotels. The new Courtyard by Marriott,
currently under construction, will provide a greater range of services but there are no full service or luxury
hotels within the city.
Opportunity
To build a “select service” hotel to take advantage of business generated by the recent completion of the
New Braunfels Civic Center and to encourage the expansion of restaurants and shopping in the
downtown study area.
49
Table (27)
Hotel Market List
New Braunfels
Hotel/Motel
Rooms
Type
America's Best Value Inn & Suites 375 S Hwy 46
Address
52
Extended Stay
Best Western Inn & Suites
1493 N IH-35
61
Extended Stay
Budget Inn
348 IH-35
42
Economy
Comfort Suites
1489 N IH-35
62
Extended Stay
Days Inn
963 N IH-35
60
Economy
Econo Lodge Inn & Suites
1254 FM 1101
50
Extended Stay
Edelweiss Inn
1063 N IH-35
40
Economy
Executive Inn & Suites
808 S Hwy 46
33
Extended Stay
Faust Hotel
240 S Seguin
61
Boutique
Gruene Outpost River Resort
1273 River Terrace
44
Economy
Hampton Inn
979 N IH-35
62
Economy
Heidelberg Lodges
1020 N Houston Ave.
Holiday Inn
1051 N IH-35
140
46
Economy
Extended Stay
Howard Johnson
201 Loop 337
40
Economy
John Newcombes Tennis Ranch
325 Mission Valley Rd.
41
Extended Stay
La Quinta Inn & Suites
365 S Hwy 46
74
Extended Stay
Motel 6
1275 N IH-35
50
Economy
Quality Inn & Suites
1533 N IH-35
69
Extended Stay
Red Roof Inn
815 S IH-35
81
Economy
Resort at the Bahn
305 W Austin St.
147
Extended Stay
Resort at the Rapids
370 W Lincoln St.
85
Extended Stay
Rodeway Inn
1209 N IH-35
128
Economy
Sleep Inn & Suites
1477 N IH-35
57
Economy
Super 8 Motel
510 S Hwy 46
50
Economy
T Bar M Resort
2549 W Hwy 46
90
Extended Stay
The Other Place Resort
385 Other Place Dr.
41
Extended Stay
Total Existing Rooms
1,706
NB Hot els.xls
50
New Braunfels Market Area
Existing Hotels
Riv
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1. Americas Best Value Inn & Suites
2. Best Western Inn & Suites
3. Budget Inn
4. Comfort Suites
5. Days Inn
6. Econo Lodge Inn & Suites
7. Edelweiss Inn
8. Executive Inn & Suites
9. Faust Hotel
10. Gruene Outpost River Resort
11. Hampton Inn
12. Heidelberg Lodges
13. Holiday Inn
14. Howard Johnson
15. John Newcobes Tennis Ranch
16. La Quinta Inn & Suites
17. Motel 6
18. Quality Inn & Suites
19. Red Roof Inn
20. Resort at the Bahn
21. Resort at the Rapids
22. Rodeway Inn
23. Sleep Inn & Suites
24. Super 8 Motel
25. T Bar M Resort
26. The Other Place Resort
on
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5
13
16
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Cou
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Guadalupe County
Prepared by Capitol Market Research, June 2009
Market Assessment for Downtown New Braunfels
Downtown New Braunfels has not proportionately benefited from the growth in the City of New Braunfels
and surrounding residential areas. As the population has grown at the edge of the city, retail services
have followed and new shopping centers have been built. The traditional center of commerce in
downtown has been neglected as residents and visitors alike spend their money in other parts of town.
The long term vitality of downtown is based on its ability to successfully compete with other areas of the
city for shopping, employment opportunities and residential development.
Commercial Development Opportunities
The historic character of downtown and its cultural vitality give it an advantage in the competition for
consumers who are seeking a unique shopping experience. While downtown does offer a range of
services, there are gaps in the retail mix and some market segments that are not addressed at all.
Residents in downtown find some of their daily needs met in the area, but most will venture out of
downtown to make shopping trips for weekly staples and specialty items. Visitors to New Braunfels are
generally unaware of the shopping and dining opportunities that currently exist in downtown. Many
visitors know New Braunfels only as the location of the Schlitterbahn Water Park and the music hall and
river restaurant in Gruene. While those who work in downtown are generally aware of the range of
downtown dining and entertainment options, the residents who live and work in other parts of town are
less likely to know of and frequent the downtown restaurants and stores near the town square.
While downtown does have a nucleus of shopping opportunities, the scattered distribution of stores
(disrupted by vacant storefronts and office users) hinders the establishment of the “critical mass” that is
necessary to make downtown a “specialty retail” shopping destination. Specialty retail shopping can be
successfully developed, even when the aggregate retail expenditures in the region are met by the existing
shopping centers. Specifically to be considered are those stores which address occasional or specialty
goods and services such as:
 Antique clothing and furniture
 Art Galleries
 Book stores and card shops
 Bakeries and coffee shops
 Cinema (such as Alamo Drafthouse, Movie Tavern)
 Computers and electronics
 Drugstore
 Clothing, including men’s and children’s
 Furniture, perhaps hand-crafted
 Groceries, with specialty products or “organic foods”
 Photography supplies and equipment
 Mail and package shipping service
 Restaurants with table service
Office Development Opportunities
A majority of the employment opportunities in downtown are provided by the public sector in the City and
County government offices. New Braunfels Utilities (NBU) also has their main office in downtown, at the
northeast corner of the main square. Several banks have their offices downtown and attorneys,
particularly those with a courthouse practice, are well represented in the area. There are also a number
of real estate offices and other professional service companies.
The vacant second floor space in several downtown buildings seems ripe for conversion to office use.
Recent advances in multiple office network connectivity make “back office” uses a potential market niche,
52
and small technology oriented businesses could also be attracted by the historic character of the
downtown buildings. However, the electrical and telecommunication wiring for technology driven
business far exceed the early 20th century service available in most second floor spaces. Also, the fire
code requirement for a second means of egress is a physical and financial obstacle for office uses on the
second floor. In many cases, the retrofit of existing buildings is possible, but building owners or tenants
may need financial assistance or tax breaks to make the necessary upgrades economically viable.
Residential Development Opportunities
Several historic residential neighborhoods are located close to downtown and there are numerous single
family houses located in the downtown area, many of which are still occupied by families, not businesses.
In addition, a market opportunity exists for the construction of small scale infill housing for rent, and
eventually condominiums for purchase. The market success of the Landmark Gardens and Landmark
Lofts, located just west of downtown on Landa Street, indicates a market desire for near downtown living
in a unique, urban setting. Some second (and third) floor historic buildings are already in use as
apartments, but other buildings could be converted and new multi-family or mixed use development on
vacant of underutilized lots is a possibility.
The proximity of existing residential neighborhoods makes higher density housing (as a transition to the
retail and business core) a more distinct possibility. The presence of downtown residents “activates” the
street in the evening and provides a customer base for new retail development. The dual objective of
increasing the residential population base in downtown and increasing the diversity of retail may be most
appropriately addressed through mixed use retail and residential development on appropriately located
vacant or underutilized sites.
Hotel Development Opportunities
As noted above, most tourists who visit New Braunfels are visiting Schlitterbahn or Gruene, or they are
attending one of the signature festival events like Wurstfest and the Wine and Food Festival. There are
also several museums in New Braunfels that include the new Children’s Museum, the Heritage Village
Museum of Texas, Sophienburg Museum and the Museum of Texas Handmade Furniture. And in 2008,
the city completed a new conference center with 56,000 sq. ft. of meeting space.
Based on an April 2009 survey conducted by Capitol Market Research there are 1,751 hotel rooms in 28
locations in New Braunfels. And currently there are 6 new hotels under construction and three more
planned. All six hotels under construction are located in the IH-35 corridor or near Loop 337, and none of
the 543 new rooms will be located in downtown. In fact, the most recent addition to hotel rooms in
downtown was the addition of the Faust Hotel (61 rooms) in 1929.
With a rich history based on the founding of the community by German immigrants in 1845 there is a
significant opportunity for “heritage” tourism that is beginning to take hold. In fact, two significant murals,
that portray a part of the city’s history, have been commissioned and painted on the side of buildings in
downtown, and fundraising is currently underway for a third.
While the opportunities for more tourism and the associated lodging expenditures is evident, downtown
New Braunfels has captured only a small fraction of the growing lodging business in the city. The lack of
a nationally known hotel operator and the inferior quality of the accommodations coupled with the lack of
easily developable sites has impeded the growth of the hotel business in downtown.
53
Opportunity Sites
Six sites have been identified as potential “opportunity sites” for a select service hotel or mixed use
development. These five sites are distributed throughout downtown and are currently in an alternate, less
“intense” land use. A brief description of the sites is provided below.
(Site 1) 444 Bar and Grill
This 2.53 acre site is located on the northeast corner of downtown on the Comal River at 444 E. San
Antonio. While the site is small for a hotel site and provides topographic challenges, a mixed use
development with a signature high turnover restaurant would have significant appeal.
(Site 2) Producer’s CO-OP
This 2.5 acre site is located southeast of the Main Plaza on South Castell at 210 S. Castell. Although this
is not located on the major shopping street (San Antonio), a select service hotel at this site would
encourage retail growth along South Castell and would broaden the area of downtown retail development
and support the conference center down the street. If the CO-OP site is combined with one or more
adjacent properties, a significant hotel or mixed use development opportunity could be realized.
(Site 3) Elk’s Lodge
Located at 353 S Seguin Ave., this site is just outside of the downtown market area but across the street
from the New Braunfels Civic Center. While the Elk’s Lodge is of historic significance, the remaining
structures on the block could be replaced by a hotel and residential casitas.
(Site 4) ADM Mill
This 3.78 acre site is the current location of an operating flour mill. While the mill location on the Comal
River is historically appropriate, the site’s size, river frontage and proximity to Schlitterbahn make it a
prime redevelopment site for hotel or mixed use development.
(Site 5) Faust Hotel Parking Lot
Located at 240 S Seguin Ave., this is the current site of the Faust Hotel which currently has 61 rooms.
The pre-existing surface parking lot behind the building could allow for a possible expansion of the Faust
Hotel and an adjacent parking structure.
(Site 6) City Hall
Located at 424 S. Castell Ave., this is the current location of the New Braunfels City Hall. Although it is
positioned slightly farther away from the Main Plaza, this site is across the street from the New Braunfels
Civic Center and could be a convenient location for business travelers and conventioners.
54
New Braunfels Market Area
in
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Opportunity Sites
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Downtown Study Area
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c:\Projects\2009\New Braunfels Masterplan\opp_sites.mxd
Ac
ad
em
y
Co
ll
Ja
hn
Sa
nta
Cl
ar
a
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1. 444 Bar and Grill
2. ADM Mill
3. Elk's Lodge
4. Faust Hotel Parking Lot
5. Producer's Co-Op
Ca
ste
ll
Gu
en
the
r
Prepared by Capitol Market Research, June 2009
Downtown Study Area Land Use and Value
Capitol Market Research (CMR) obtained from the Comal County Appraisal District (Comal CAD) the
2009 preliminary tax roll that includes a property “structure code” that can be used to establish land use.
The appraisal data shows total land value within the market area of $28,845,580 and total improved
property value of $43,375,850. The total assessed value of $72,221,430 is approximately 1.752% of the
total value of the tax rolls for the City of New Braunfels. The land use map shows a concentration of
residential and retail uses in the southern portion of the study area and vacant uses in the northeast
quadrant of the study area. Moreover, there are several parcels exempt from property taxes, including the
Comal County Courthouse Annex and “old” Courthouse, New Braunfels Utilities, New Braunfels Civic
Center Offices and Communities In School of South Central Texas, a non-profit. Both land use and
values represent the preliminary tax roll for 2009.
Table (28)
Downtown New Braunfels Master Plan
Parcel Values by Land Use Category in Downtown New Braunfels
Land Use Category Acreage
Church
Duplex
Government
Hotel
Medical
Mixed Use
Non-Profit
Office
Park
Parking
Railroad
Residential
Retail
Vacant
Warehouse
Total
1.946
0.643
1.274
0.848
0.214
28.574
0.121
12.074
0.472
7.358
2.395
17.681
17.025
15.315
0.912
106.852
Sq. Ft. of
Improvement
4,067
4,998
100,000
17,850
3,500
172,731
3,727
197,610
4,300
273,796
0
93,570
304,084
0
19,012
1,199,245
Land
Improved
Market
Market
Value
Value
$474,990
$1,598,500
$214,600
$165,940
$189,240
$650,000
$234,880
$1,050,180
$101,260
$208,160
$5,676,660 $9,501,540
$100,360
$311,300
$5,890,390 $9,444,370
$119,970
$55,700
$2,433,710
$513,140
$281,970
$0
$4,215,120 $5,760,780
$6,169,150 $9,550,890
$2,191,020
$0
$332,810
$180,830
$28,626,130 $38,991,330
Total
Market
Value
$2,073,490
$380,540
$839,240
$1,285,060
$309,420
$15,178,200
$411,660
$15,334,760
$175,670
$2,946,850
$281,970
$9,975,900
$15,720,040
$2,191,020
$513,640
$67,617,460
Source: Comal County Appraisal District 2009 Preliminary Tax Roll
Prepared by Capitol Market Research, May 2009
parcels.xls
From a land use perspective, the largest percentage of downtown properties are listed as mixed use
(28%) where 28.574 acres out of a total of 108.335 are in mixed use retail and office or retail and
residential land uses. The second largest category of use is residential, which is primarily detached
single family homes. Following that is 17.025 acres of “stand alone” retail establishments and 12.074
acres of office use.
It is interesting to note that the 108.335 acres that comprise the downtown area is only 0.38% of the land
area in the City of New Braunfels and yet the value of the study area is 1.75% of the total assumed value
in the City. While it is probably that all city services are not allocated on an acreage basis, it is quite likely
that the downtown study area is not the recipient of a proportionate share of all city services if those
services are based on assessed value.
56
sla
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New Braunfels Market Area
ion
Un
2009 Comal CAD Parcels
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0.125
Miles
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the
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c:\Projects\2009\New Braunfels Masterplan\parcels.mxd
l
Bu
tc
he
r
Sa
n
An
to
ni
o
M
ill
Se
gu
in
Downtown Study Area
Office
Church
Park
Duplex
Parking
Government
Railroad
Hotel
Residential
Medical
Retail
Mixed Use
Vacant
Non-Profit
Warehouse
Prepared by Capitol Market Research, May 2009
Downtown Development Strategy
As identified in previous sections of the report, the market potential for additional retail, residential and
hotel uses in downtown is strong and growing, as the community expands its job base and attracts new
residents. There are several issues that need to be tackled in order to maximize the potential for creating
a vibrant and profitable downtown market district. The strategy for creating this vibrant downtown must
address five key issues.
1) Solidify and expand the core retail district on S. San Antonio St.
The historic retail core of downtown is located between the Plaza and the railroad tracks
on South San Antonio Street. While there are several very nice specialty retail shops in
that area, the presence of vacant storefronts and ground floor office uses disrupts the
pedestrian experience and deters potential customers from walking from store to store,
down the street. A concerted effort should be made to secure complimentary tenants for
vacant spaces, and where possible convert office leases to retail. There already is a
small nucleus of specialty retail, dining and entertainment in the area, and expanding all
three retail categories will add to the profitability of the existing businesses and create an
attractive retail destination.
A corollary objective is to change the image of the area from a collection of individual
stores into a shopping district. One fairly inexpensive recommendation to implement is to
establish a consistent set of hours of operation for all retail business in the area. If
everyone in the community knew that all downtown businesses are open from 10:00 am
to 6:00 pm Monday through Saturday and 1:00 to 5:00 pm on Sunday, then the prospects
for capturing more local and tourist business would dramatically increase.
2) Expand the mix of uses to include more hotel rooms and entertainment venues
With the recent completion of the New Braunfels Civic Center, an opportunity now exists
to entice a “select” service hotel developer to expand in the downtown market and
capture a portion of the increasing percentage of the business and convention travelers
that are coming to the city. While a large percentage of the hotel business is currently
leisure travelers, the growth of the city and its expanding economic base means there will
be an increase in business travelers and, with the addition of the civic center, more group
travel and convention business.
It is likely that some financial incentive will be needed to attract a new hotel downtown
and CMR recommends that the City consider assisting in the attraction of a new
downtown hotel through land acquisition and/or assistance with assemblage.
In addition to the hotel, another catalytic use would be a movie theater where “First Run”
movies are shown in a venue that serves meals and drinks while the movie is showing.
Two successful Texas chains that promote this product are the Alamo Drafthouse and
Movie Tavern.
3) Encourage downtown residential and mixed use development
There are already several mixed use buildings in the downtown area. Black Whale Pub
with residences above, Salon Chic along San Antonio with Splashtacular Entertainment
on the second floor, and the Crosswalk Café with law offices occupying the second floor
are several examples. When people live in downtown they are much more likely to work
and shop in the downtown area, thus adding vitality to the office and retail uses. As the
residential base expands, the demand for retail services also grows and opportunities for
new stores will emerge.
58
In addition to the hotel and entertainment uses discussed above, new residential
development will help to support the existing retail and will add to the tax base, which in
turn will add revenues to a potential downtown development district.
4) Support the expansion of commercial and residential uses with an effective parking
strategy
While parking is not specifically a market demand issue, the perceived lack of parking
downtown is a problem which discourages potential customers from shopping in the
downtown area. As noted earlier, the lack of parking meters and time limits on the
spaces in front of stores encourages shop employees and office workers to park in (what
could be) the most convenient spaces for retail. While a comprehensive parking strategy
is necessary to support long term growth objectives, at a minimum, the proposed two
hour parking limit should be implemented on South San Antonio Street. In addition, the
conversion of the parallel parking spaces to angled parking will add much needed
capacity in the core retail district.
5) Establish a Downtown New Braunfels Development Corporation
In order to implement the preceding recommendations, CMR recommends the formation
of a Downtown New Braunfels Development Corporation. This entity would be a
voluntary association of property owners who agree to assess themselves a small
amount of property tax to help fund necessary improvements within the downtown area.
This Public Improvement District (PID) revenue potential could be further enhanced if the
City established a Tax Increment Financing district (TIF) for the same area.
The establishment of a downtown development corporation accomplishes several
objectives. Of primary importance, it gives the downtown property owners a collective
“voice” and a chorus of voices is often heard more readily than a solo performance.
Since the PID is a voluntary association of property owners, with an elected board of
directors, the implementation of policy will require extensive discussion and the creation
of consensus in order to move forward. This spirit of cooperation will make it more likely
that collective actions, like the establishment of uniform hours of operation, are
implemented quickly. Finally the formation of a PID and a TIF will give the downtown
development corporation a source of funds which are specifically dedicated for use within
the PID district boundary.
As noted earlier, the downtown study area is a net “exporter” of tax revenue when
compared with other parts of New Braunfels. The establishment of a TIF district would
direct the increase (increment) in tax revenue back into the district for future infrastructure
improvements. These improvements will then foster additional development and property
value increases in the district.
For the purpose of discussion, within the 108 acre study area, the estimated “taxable”
property value for 2009 is $54 million. If a $0.10 voluntary PID tax was implemented, the
development corporation would receive $54,000 in 2009. If the increase in taxable value
between 2008 and 2009 within the study area was 6%, the tax “increment” generated by
the city tax rate ($0.409862) would yield approximately $12,600. While this initial amount
is small, the increment will grow over time and become a very significant revenue source.
Taken together, the $66,600 first year revenue could (for example) be used to fund a
portion of the two hour parking limit signs and repainting of the parking spaces.
59
Table (29)
Market Opportunities
#
Recommendation
4.1 Establish a funding
source dedicated to
Downtown
Improvements
4.2 Solicit a "select
service" hotel to
locate in Downtown
New Braunfels
Responsible
Party
Status of Implementation
Timeline
Short/Mid City Staff
City would need to establish
and Council district area and solicit
property owner participation
Mid/Long
Potential
Funding
Sources
n.a.
City and
private
developers
Aquire site and reduce
G. O. Bond
parking requirements; update funds, public,
building codes, create
private JV
partnership with potential
brands: Aloft, W Hotels, Nylo
Hotels, Hilton Garden Inn
4.3 Incentivize "infill
Short/Mid
occupancy" for vacant
space along San
Antonio St.
City and
building
owners
Meet with building owners to
determine interest in working
cooperatively on store hours
and tenant selection
Main street
program, PID
and TIF funds
4.4 Incentivise "infill
Mid/Long
development" for
vacant lots along San
Antonio Street with
pedestrian -oriented
businesses
City and
private
developers
Identify owners with available
parcels, offer city incentives
through zoning or code
changes to developers,
organize banks to create a
shared debt pool, provide tax
abatements
City, private
equity and
debt financing
4.5 Expand multi-family
house options
City and
private
developers
Identify owners with available
parcels, offer city incentives
through zoning or code
changes to developers,
organize banks to create a
shared debt pool, provide tax
abatements
City, private
equity and
debt financing
City
Meet with ASA Rail Board
and Staff
Mid/Long
4.6 Lobby for a commuter Mid/Long
rail stop and related
transit-oriented
development
TBD
opp.xls
60
The Vision for Downtown New Braunfels
Through Wassailfest and Wurst Fest, the Wine and Food Festival and the many other local events, New
Braunfels has successfully captured weekend tourists and festival business. The implementation of the
Downtown Master Plan will help the New Braunfels’ downtown study area attract business on an ongoing
basis, both local and tourist, between the major festival events.
While the new civic center encourages convention business, the development of a “select” service hotel
will provide travelers and tourists with a place to stay within the city core. The additional visitors
generated by the hotel will help fill downtown retail shops and cafes, and assist in establishing Downtown
New Braunfels as a destination, separate from Schlitterbahn and Gruene.
By changing the parking from parallel to angle and establishing a time limit, hotel guests and locals can
be assured a place to park, thus enhancing the sales opportunities for local business. As office users
move to second floors and empty first floor spaces are filled, the reinvigorated downtown landscape will
become the center for shopping and dining in New Braunfels. Locals and tourists alike will shop and dine
together along San Antonio, while longer operational hours will encourage out of towners to spend more
and stay longer. With the combination of a new movie theater and the Brauntex, the night time clientele
will include a lively mix of young and old, singles, couples and families.
61
Building Inventory and Square Footage by Type of Use
Capital Market Research (CMR) has determined that the study area in downtown New Braunfels currently
encompasses 1,482,395 square feet of usable space, of which 1,384,260 square feet is currently
occupied (93%). This space is evenly split between commercial (604,363 sq. ft.) and non-commercial
uses (604,236 sq. ft.). Among the commercial uses, the most prevalent are buildings occupied by office
(292,978 sq. ft.) and retail (212,175 sq. ft.) not including restaurants or bars. A large percentage (30%) of
the office space is currently occupied by tenants who are involved in the Insurance, Real Estate, and
Legal Practice services (84,886 sq. ft.). In addition, there is also a significant amount of downtown space
dedicated to restaurants (71,526 sq. ft.) and bars (25,537 sq. ft.), with a variety of types and locations
within the area.
The largest users of Non-Commercial space in downtown are the local City and County government
offices (218,513 sq. ft.), as well as the various aspects of the ADM operation (228,970 sq. ft.). The
government offices, which include the courts and various government support offices, take up over a third
of the non-commercial uses in downtown New Braunfels. Besides the ADM facilities, a large user of
downtown space is dedicated to religious establishments (77,596 sq. ft.), and the two hotels that are
located in the downtown area (25,970 sq. ft.).
CMR also took note of the amount of developed space that was dedicated to parking, which totaled
273,796 square feet of surface parking lots throughout the downtown area. This use accounts for about
20% of the total downtown developed square footage.
Table (30)
Downtown New Braunfels
Land Use by Category
Commercial Space
Occ Sq Ft
% Occ
10,831
10,831
100%
Office
292,978
236,991
80.9%
Retail (Soft Goods, Other)
212,175
191,995
90%
Retail (Restaurants/Bars)
88,379
86,153
97%
604,363
525,970
87%
Mixed Use
Sq Ft
Non Commercial Space
Church
77,596
77,596
100%
218,513
218,513
100%
25,970
25,970
100%
228,970
228,970
100%
Residential
21,396
17,636
82%
Non-profit
12,779
12,779
100%
Warehouse
19,012
2,242
12%
604,236
583,706
97%
273,796
273,796
100%
1,482,395 1,383,472
93%
Government
Hotel
Manufacturing
Parking
So urce: Co mal Co unty A ppraisal District, City o f New
B raunfels, CM R field survey June 2009
62
parcel2.xls
APPENDIX
Certificate
The undersigned do hereby certify that, except as otherwise noted in this market/feasibility report:
We certify that we have personally inspected the aforementioned subject property, and that our fee is in
no way contingent upon the determination of feasibility reported herein.
We have no present or contemplated future interest in the real estate that is the subject of this report.
To the best of our knowledge and belief the statements of fact contained in this report, upon which the
analyses, opinions and conclusions expressed herein are based, are true and correct.
This report sets forth all of the limiting conditions (imposed by the terms of our assignment or by the
undersigned) affecting the analyses, opinions and conclusions contained in this report.
Recognition is hereby given to Emily Phillips, Monica Luera, Namita Parikh and Steve Plevak for their
assistance in the preparation of this report.
No one other than the undersigned prepared the analyses, conclusions and opinions concerning the real
estate that are set forth in this report.
Respectfully submitted,
CAPITOL MARKET RESEARCH, INC.
Charles H. Heimsath, AICP
President
64
CHARLES H. HEIMSATH: QUALIFICATIONS
Charles H. Heimsath graduated from The University of Texas in 1976 with a Master of Science degree in City
Planning. He has been active in the real estate market since 1976 in the areas of commercial and residential
brokerage, market and feasibility studies, and real estate research. Prior to his association with Capitol Market
Research, Mr. Heimsath was a senior project manager in charge of feasibility/market research with an appraisal firm,
R. Robinson & Associates, Inc., Austin, Texas. Between 1980 and 1983 he was responsible for managing the real
estate research division at the Rice Center in Houston.
Since moving to Austin in February 1984, Mr. Heimsath has conducted or managed over 300 market research and
feasibility projects covering a range of property types from residential and mixed-use subdivisions through
office/warehouse and service center space to downtown office buildings. His work has also included population
forecasting for several cities, consultation to the General Land Office, The University of Texas System, and an
assessment of the economic and land use impacts of closing Bergstrom Air Force Base.
EDUCATION
B.S. in Economics, University of Vermont, Burlington, Vermont; June 1972
M.S. in Community and Regional Planning, The University of Texas, Austin, Texas; August 1976
Post Graduate Studies, Rice University, Houston, Texas; 1980, 1981
PROFESSIONAL MEMBERSHIPS & CERTIFICATIONS
American Institute of Certified Planners, AICP
American Planning Association
Real Estate Council of Austin, former Boardmember
Texas Real Estate Broker #188355-13
Urban Land Institute
Downtown Austin Alliance, Boardmember
PROFESSIONAL EXPERIENCE
Capitol Market Research, Inc., President: Project feasibility analysis, market studies, economic impact analysis
and demographic forecasting. June 1986 - Present
R. Robinson & Associates, Project Manager: Real estate research, market and demographic studies, land-use
forecasting: February 1984 - June 1986
South Main Center Assoc., Associate Director: Construction management, office administration, policy
development, community outreach: February 1983 - February 1984
Rice Center, Senior Associate: Senior project manager responsible for real estate research, urban development
and economic forecasting: October 1978 - February 1983
Mayor's Office, City of Houston, Urban Economist: Responsible for preparing the Overall Economic Development
Plan (OEDP) for Houston: October 1976 - October 1978
65

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