USAA Reduces Presence in Downtown San Antonio Amid New Reality of Pandemic Offices

In 2017, USAA’s plan to relocate employees to two buildings in downtown San Antonio was hailed by officials as a victory for expanding the workforce there.

“Moving 2,000 jobs downtown is a game-changer for the community,” then-city manager Sheryl Sculley said at the time.

But changes brought on by the coronavirus pandemic have led the insurance and financial services company to reassess its office space needs. Today, USAA is ending expansion agreements with the City of San Antonio and Bexar County as it cuts downtown staff.

Under agreements negotiated in 2017 and 2018, USAA said it would create 1,500 new jobs in San Antonio and relocate 2,000 office workers to One Riverwalk Place and 300 Convent St., formerly Bank of America Plaza. .

The San Antonio company planned to invest $70 million in building improvements and a parking lot expansion.

In return, he was to receive a loan and tax abatement from the city worth an estimated $6 million. County commissioners have approved a tax abatement worth an estimated $1 million.

USAA had several hundred workers downtown at the time. Local officials said the business expansion would help revitalize the area, attract residents and boost restaurants and shops.

USAA hoped that expanding its downtown offices might help attract potential hires.

“The downtown expansion allows us greater access to employees with the skills and talents we need to better serve our members,” Stuart Parker, then USAA CEO, said in a press release. .

COVID-19 has changed that.

“The pandemic and the shift to hybrid and remote working have changed our real estate needs, USAA spokesperson Christian Bove said this week.

Before the pandemic began to take hold in early 2020, about 1,600 employees worked downtown, he said.

About 19,000 of USAA’s 35,000 workers are based in San Antonio. Many worked at the company’s sprawling headquarters on the northwest side, and the company rented other offices around the city.

But as COVID cases increased, he sent employees home and repeatedly postponed his return to the office. It eventually adopted a hybrid model with options for staff to work remotely, in the office, or a combination of both.

Last fall, the company averaged between 10 and 15 percent occupancy in each of its offices each day.

USAA decided last year to vacate and sublet some of its downtown space and sought to sublet its offices in the Vista Corporate Center and WestRidge office buildings on the northwest side.

The company ended its agreements with the city in February and April and with the county on Tuesday. Bove said USAA would fully refund all payments and tax abatements received in exchange for the downtown expansion.

USAA still has a downtown presence, with space to accommodate about 1,000 employees in a hybrid format, he added. It is not known how many are affected.

Like many businesses, USAA is re-evaluating its office needs and may not have been able to meet its commitments as easily, said David Marquez, county director of economic and community development.

Potential employees previously attracted to working downtown may now be more interested in remote or hybrid options, he said.

“Certainly needs at all levels have changed as a result of the pandemic,” a city spokesperson said in a statement. “The Economic Development Department is committed to building a strong and resilient economy. This includes identifying opportunities to strengthen neighborhoods and areas of our city, including downtown.

But the USAA reduction is a blow to downtown San Antonio, which has struggled during the pandemic.

The central business district comprises a fraction of the city’s office market, which has historically been concentrated on the northwest side.

But it has been hit hard in recent years as companies adopt hybrid models and employees seek to avoid the virus and travel. Restaurant and store owners are struggling with a shortage of foot traffic.

The vacancy rate for about 7.7 million square feet of office space in the central business district was 17% in the first quarter, according to commercial real estate firm Transwestern.

This does not include subleased and so-called ghost space, or square footage that a business is not using and is looking to lease or vacate.

During the same period in 2019, before the pandemic, the rate was 6.6%.

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