Port San Antonio's board on Tuesday approved funding for finalizing details of an office building at the 1,900-acre campus.
A wing-shaped office tower with some of the priciest rents in the city could begin rising next year at Port San Antonio as part of a plan to lure more companies to the former Air Force base. The 12-story building would stand out among the low-slung industrial facilities at the 1,900-acre campus and on the South Side , where little high-end office space exists.
It's not just office space. A childcare facility, hotel, grocery store, space for restaurants and shops and a vertiport with air taxis ferrying people around the area also are in the works at the port. “Sometimes I get a little bit taken aback. People say, ‘Jim, why are you trying to build all these nice amenities down at the port?’ And I say, ‘Well, nobody ever goes and asks Graham and Randy why they’re trying to build nice amenities downtown,’ ” Port CEO Jim Perschbach said, referring to Graham Weston and Randy Smith, leaders of downtown development firm Weston Urban. RELATED: Think Jetsons: Port San Antonio could be air taxi hub of future His plans are moving forward, though. On Tuesday, the port's board approved spending $7.5 million to finalize architectural plans, a budget and a timeline for the roughly 300,000-square-foot office building, dubbed Innovation Tower, at the entrance to the campus. The building is expected to cost about $275 million, with construction slated to begin next year and wrap up in 2028 or 2029. Rents are anticipated to be $50 a square foot and higher, topping rates for new office buildings around Pearl and downtown. “We’re not getting laughed out of the market with that,” Perschbach said. Once such details and move-in dates are set, companies will be willing to begin signing leases, he said. Perschbach wants the building to be from 33% to 50% pre-leased before construction begins and doesn’t expect difficulties filling and financing it. Companies want to be at the port: About 97% of the 10 million square feet of existing space across the campus is occupied and the rate for just offices is north of that, Perschbach said. It’s home to more than 80 tenants with about 18,000 employees combined, a workforce Perschbach expects to double in the next seven to 10 years. Some of those tenants want to expand and the port gets calls weekly from other businesses seeking space. RELATED: Air Force confirms consideration of Port San Antonio’s bid to build, host new cyber headquarters Plans at the port are moving forward even as developers elsewhere have struggled to line up financing for office developments in the wake of the pandemic, with lenders reluctant to back such projects because of the shift to hybrid and remote work. Perschbach said the port can point to its low vacancy rate as proof of ample demand and leverage its entire campus as a revenue and asset base, unlike a developer trying to build a standalone project. The building will be financed with a combination of debt and the port’s own capital. “This isn’t just some sort of ‘build it and they will come’ effort,” he said. “We’re very confident we’ve proven our market.” The tower would be a symbol of the cybersecurity, aerospace, defense and advanced manufacturing work being done at the port — and a potential revenue stream. The port generated $75 million in operating revenue and $29.5 million in net operating income during fiscal year 2024, up about 69% and 56% from 2020, respectively. “I don’t want to build a bread-and-butter building,” he said. RELATED: Port San Antonio lands second cyber defense company in as many weeks The Innovation Tower is part of Perschbach’s grander vision for the former Air Force base. He has pitched the Air Force on moving the 16th Air Force, the service’s cybersecurity and information warfare headquarters, from nearby Joint Base San Antonio-Lackland, a $1 billion-plus proposal that’s drawn bipartisan support from lawmakers. A cyber center for government agencies and companies, a vertiport, a childcare facility, a large hotel, a fitness center, temporary military housing, restaurants and stores also are planned. Childcare is a major concern for the military and commercial sectors and offering it can help employers retain workers, Perschbach said. He said port executives have spoken with Pre-K 4 SA, the city-funded early childhood education program, and talked to companies and military branches about guaranteeing slots for workers, though no deals have been finalized. “We’ve got a lot of people working down here and, like everybody else, they want places that are relatively convenient to go eat, places that are relatively convenient to drop off and pick up their children, a fitness center, hotel, that kind of stuff. So amenitizing it, if done correctly, not only provides some level of revenue to us as a landlord but it helps us go and sell the office building,” he said.
Weston Urban Port Joint Base San Antonio Lackland Jim Perschbach Randy Smith Graham Weston Pearl Port San Antonio San Antonio Innovation Tower South Side Skyline. Pre-K 4 SA Think Jetsons
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