GFR Development Services
- Written by: Matt Dodge
- Produced by: Joe Atwood
- Estimated reading time: 7 mins
As the second-fastest growing state in the nation, Texas is a hotbed for commercial development. While Houston leads the state as Texas’ fastest-growing city, the San Antonio area is not far behind, with the city itself adding more than 50,000 residents in two years and nearby New Braunfels ranking as the nation’s second-fastest growing city, with 6.6 percent annual growth.
Founded in 2009, GFR Development Services is leading the charge to meet this ever-increasing need across the San Antonio area. The real estate development was started by Mark Granados, an experienced developer with over 30 years’ experience and $2 billion in shopping center transactions to his name.
Designed to serve as a one-stop shop for commercial development and brokerage, GFR specializes in retail development and redevelopment, from ground-up development to urban infill, land assemblages, fee development build to suits, and brokerage including in house sales/leasing, third party representation and tenant representation. In the seven years since its inception, the company has completed over 3.5 million square feet of retail shopping centers.
“We buy a lot of our properties off market or before they hit the market through both our network as well as just seeking out sites ourselves that fit our requirements,” says Adam Schiller, director of sales and leasing at GFR. “There are few development or redevelopment scenarios that scare us and we are not afraid of working through issues as long as the development pencils out.”
GFR also offers a full slate of tenant representation services, studying local market conditions, demographic trends and retail movements to ensure that every business has the opportunity to succeed.
The company also handles project marketing and leasing for all of its own developments, as well as those projects built by others, with an impressive occupancy rate to its name. As a company intimately familiar with the San Antonio market, GFR is able to strategically identify promising tenants for retail developments that will not only attract the right customers, but other complementary retail businesses as well.
While GFR made a name for itself as a developer of big-box, the company made a decision based on market conditions to shift gears and find a new niche when the market became unsustainable owing to three primary factors: tenant expectations, financing and the internet.
“The internet has had a far greater impact on our industry than some like to believe. Retailers across the country are downsizing and there are just simply fewer out there.”
“The internet has had a far greater impact on our industry than some like to believe. Retailers across the country are downsizing and there are just simply fewer out there. And where there used to be more competition within each category of retailer, now there are only one or two viable options in many cases,” says Schiller.
This changing retail landscape led GFR to seek out tenants whose products and services aren’t readily available on the internet, such as restaurants, medical and service-oriented retailers. “We are also doing smaller projects where losing a tenant doesn’t hit you with a 20,000- or 30,0000-square-foot vacancy with only a few viable options to back fill it with. Most of our vacancies that come up are in the 1,200- to 5,000-square-foot range where there is a list of potential tenants to backfill the space,” says Schiller.
When a big box retailer signs on to be the cornerstone of a new retail development, its owner is often given breaks on rent, placing an increased emphasis in filling out the remaining space in the development with tenants who will help the overall project turn a profit.
“These tenants can get away without paying much because of lot of these larger developments will not get off the ground without them to lead it off,” says Schiller. “You are forced to get all that value back with the remaining pads and retail space, and you may not know if this has really worked out for you until you get the last bit of space filled.”
Growth in South San Antonio
While many parts of San Antonio are currently experiencing a population and development boom, GFR has gravitated toward working in the city’s southern sector in recent years. The company currently has 25 to 30 projects in various stages of pursuit and development in South San Antonio and is bullish about the region’s future.
“With more new multifamily housing, the area is beginning to be regentrified and as retailers and restaurants are coming back into these areas, they are starting to attract people to move back in. We seek out sites with these conditions on heavily traveled roads and dense populations to make it difficult for the tenants we attract not to succeed,” says Schiller.
In an effort to capitalize on the area’s rising profile, GFR recently unveiled two new developments located just north of Brooks City Base, a 1,300-acre mixed use development with more than 1,200 residences located on the former Brooks Air Force Base in South San Antonio.
“In the past, the residents of this surrounding area have had to travel to other parts of town in order to enjoy the services of the restaurants, entertainment and retailers that we have brought to the area; but now they are able to enjoy all of this in their own backyards in a safe, clean and convenient shopping center,” Schiller explains.
City Base West is a 250,000-square-foot retail development located in a busy commercial corridor that is also home to the new Mission Trail Baptist Hospital, University of Incarnate Word Medical School and Texas A&M San Antonio. “City Base West was a little challenging from the start as a lot of national retailers and restaurants still do not completely understand the South Side, so getting the initial interest in the project was a little slow as it often is for larger developments,” says Schiller.
The development presented a number of challenges for GFR, which had to quickly land an anchor tenant and divert a waterway to make the site into a viable piece of real estate. “Once we landed our theater and started building on that with restaurants and entertainment and then service-oriented retailers, it was somewhat of a domino effect building up that critical mass we needed to break ground,” says Schiller.
GFR is now working to develop its third and fourth properties in the area, City Base Commons, which will be located just across the street from City Base West. The 54,540-square-foot redevelopment will feature upscale restaurants, retailers and more, complementing existing businesses in the area with construction slated to begin in early 2017 as well as Presa Court located at S.E. Military & Presa.
“City Base Commons Development will require a substantial amount of fill material and utility work to bring the site up and service all of our buildings, which will likely be the most time-consuming process in developing this project,” says Schiller.
Once completed, the City Base projects will represent a valuable addition to GFR’s portfolio. “That helps prove up our ability to perform in all areas of the development process: everything from site selection and tenants mix to project design and layout, and working with the city and state to deal with the hundreds of minor and major issues and challenges that come up,” says Schiller.
A history of success
For Schiller and the GFR team, success can be measured by one simple metric: occupancy rates. As an established, experienced developer in the San Antonio market, GFR is able to maintain an impressive occupancy rate through its collaborative approach.
“Being proactive to work with tenants and find solutions to problems is the main way,” says Schiller. “Many times, if you just ask the right question and look at a problem with the mindset of figuring it out as opposed to my way or the highway, a lot of issues can be worked out before it turns to losing a tenant.”
Schiller credits GFR’s success to the vision and leadership of Granados, whose industry experience and ability to adapt has seen the company through even the leanest times.
“Mark’s ability to find great sites and his ability to work through just about any issue that comes up is on the top of the list. He makes decisions quick without a long, drawn-out process like you see with a lot of owners, and he knows what works and what does not through his many years as a developer and landlord,” says Schiller.
“His ability to adjust to the market conditions is also a huge contributing factor to our success. We have to reinvent ourselves every five years or so and this has been evident in our switch from big-box stores and power centers to smaller strip and neighborhood centers,” Schiller continues.
With a strong track record of success to its name, GFR currently has a wealth of new projects coming down the pike, with 25 to 30 currently in the works. As San Antonio continues to grow, experienced retail real estate developer GFR Development Services will be there to offer a unique approach and insight into the market.
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