REOC San Antonio
Commercial Real Estate Since 1974   
Kim_Gatley
Kim Gatley
S
enior Vice President & Director of Research at REOC San Antonio

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San Antonio Commercial Real Estate – Now vs. 1980’s

The recent slowdown in the local commercial real estate market has people asking if the market will get as bad as it did in the late 1980s.  If you weren’t around back then – it was pretty bad.  As I remember it, the San Antonio market experienced a glut of overbuilding prompted by the deregulation of the savings and loans financial institutions which allowed for increased lending for speculative real estate development.  

New construction came to a screeching halt by the end of 1986 due to changes in the federal tax lows which removed the tax benefits of real estate investment combined with the forces of a collapse in the oil industry and a national economic downturn.  In the years that followed, many financial institutions failed, foreclosures skyrocketed and most developers filed bankruptcy. 

Federal control came with the Resolution Trust Corporation (RTC) which took over operations of a significant inventory of real estate during this turbulent time.  In the local market, rental rates plummetted.  It wasn’t until the early 1990’s that ownership gradually reverted to individual and institutional owners who were able to purchase prime assets for nearly pennies on the dollar.

As I see the market today, we are nowhere near approaching the troubles experienced in the 80s.  Check out this link to a Feb 2009 article where others share their views on the topic. 

http://www.mysanantonio.com/news/Are_we_now_seeing_a_rerun_of_the_80s.html

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