by BRAD ROLLINS
Austin developer Robert McDonald plans to break ground within a month or so on more than 72,000 square feet of Class A retail and office space spread between two developments in San Marcos’ Wonder World Drive medical district.
One of those, the Sadler East expansion of the Vista Office Plaza, will add 54,000 square feet of mostly medical office space across from Central Texas Medical Center. McDonald said Vista Plaza’s existing two buildings have vacancies of smaller suites but nothing available 6,000 square feet and larger.
“There’s certainly space on the ground available [but] what’s kind of missing is something to accommodate a little larger tenant,” McDonald said. “Because we’re interested in staying in front of the market and creating a product that allows business to come in and begin operations immediately, we want to have that space available when it is needed.”
He said he expects to begin construction within 30 days on the first of three 18,000 square foot buildings.
McDonald’s other planned development, the 18,400-square-foot Red Oak Shops on Wonder World Drive next to Starplex theater, will include two buildings. The main building will include 8,000 square feet of retail and restaurant space on the groundfloor and about 6,400 square feet of office space upstairs.
The building is designed by Austin-based Studio 8 architects such that the bottom floor faces west and the second floor faces east, McDonald said. The contractor has already pulled permits to begin construction.
“It’s going to be a really good looking, distinctive building,” McDonald said.
The Greater San Marcos Partnership, a joint economic development effort of the city and Hays and Caldwell counties, recently called on developers to submit proposals for developing more Class A medical office space, saying it is in critically short supply.
San Marcos has a 100 percent occupancy rate for Class A medical office space and a 97.4 percent occupancy rate for other classes of medical office, Gary Gannon, the partnership’s spokesperson said on Thursday. The partnership uses a database of a commercial real estate listings called Xceligent for its occupancy estimates.
“Medical is one those areas that has really survived the Great Recession very well and continued to see growth. In our area, with the baby boomers and continued overall population growth, I think you’re going to see a continued need for [medical office] for some time,” Gannon said.
McDonald thinks the partnership’s occupancy estimates are too high — the developer says he’s maintaining about 90 percent occupancy in his medical offices — but that the demand is nonetheless there, or coming, to justify expansion.
Red Oak Shops and Sadler East are being marketed for lease by Austin-based Tarantino Properties.