USAA will sublease portions of its downtown office on Convent Street, as the pandemic-era trend toward remote work continues to reshape the city’s office landscape.
“Like many companies, the pandemic and a shift to hybrid and remote working have changed our real estate needs,” wrote USAA spokesman Christian Bove in an email. “We are proud to be a part of San Antonio’s vibrant downtown business community and will continue to have a presence there.”
The move, which comes a year after the financial services giant put its five-story building off I-10 up for sublease, is pending regulatory approval.
USAA Real Estate Co. bought the former Bank of America Plaza building in 2017, which it owns as part of a joint venture. The 28-story building is next door to USAA’s River Walk location on St. Mary’s Street. Prior to the pandemic, as many as 1,600 employees worked between the locations. Bove said USAA would retain space to accommodate approximately 1,000 employees working in a hybrid format.
Since last summer, the company has offered a flexible work policy, and many of USAA’s roughly 36,000 employees continue to work remotely at least part of the time.
The policy cements flexibility for what had been an emergency measure during the first shocks of the pandemic last year, when office employers across the country ditched meeting rooms for Zoom sessions and office spaces for Slack. Nearly 98% of USAA’s employees worked entirely from home for nearly a year, compared to roughly 20% pre-pandemic.
For office employers across the country, remote work and the flexibility to do so may become a permanent fixture. At the very least, it is already becoming a long-term phenomenon.
Bove said in an earlier email that the company will continue to “evaluate and adjust to support our employees and business requirements” as the impact of the pandemic becomes clearer.
With fewer employees in the office, some companies have found sublets to be an effective way to recoup expenses.
San Antonio has around 1 million square feet of office space for sublease, according to Daniel Khalil, a senior market analyst at the new San Antonio branch of CoStar, a real estate market data company. Before the pandemic, the amount of office space for sublease in the city hovered around 300,000 square feet.
“The future of office space has a big question mark over it,” Khalil said — but at least in San Antonio, the decrease in demand due to remote work will likely be offset for the foreseeable future by growth in population and office jobs.
According to Cushman & Wakefield, average office vacancy rates in the city declined slightly in the third quarter of 2021, hitting 14%. The report also showed that while there is zero new office space under construction downtown, a little more than a million square feet of new office space is being constructed in the city’s northern quadrants.
USAA isn’t among those building new office space.
Nor is the building on Convent Street, a short distance from its office space on St. Mary’s street, the only office property it’s trying to sublet.
For the past year, the company has been seeking to sublease all five floors of its 157,470-square-foot property on the North Side of San Antonio, called the Vista Corporate Center. It was the largest office space for sublet in the third quarter of 2021, according to commercial real estate firm CBRE.
The company moved into the sprawling complex just four years ago. A company spokesperson previously said exploration of that move predates the pandemic.