Accolades

Managed care firm to expand in Alamo City
San Antonio Business Journal
by Tricia Lynn Silva

A recently inked property lease on the city's Northwest Side is expected to lead to as many as 150 new jobs here.

Late last week, Minneapolis-based UnitedHealthcare signed a multi-year lease to take all of University Park Tech Center ill, a 76,487-square-foot building at 5959 Northwest Parkway, which is located near Interstate 10 in Northwest San Antonio.

UnitedHealthcare is the managed-care arm of its parent company, UnitedHealth Group. Company officials declined to comment on the lease deal or their plans here.

However, Mario Hernandez, president of the San Antonio Economic Development Foundation (SAEDF) , did offer some details regarding UnitedHealthcare's plans for the new space.

Part of the space at Tech Center ill, Hernandez says, will house the local operations for Optum - the division of UnitedHealthcare that offers support services through telephone, in-person, Internet and print channels for the managed-care company's members.

At present, the local Optum operation consists of 180 employees - all of whom will move over to Tech Center' m. The local operation includes a large number of registered nurses that operate the Optum NurseLine - which handles medical calls for UnitedHealthcare members. Presently Optum is housed at the 8401 Datapoint Building - where it leases 45,000 square feet The 152,918-squarefoot center is also located in Northwest San Antonio.

Hernandez says UnitedHealthcare plans to expand its Optum operations in San Antonio. About half of the 150 or so jobs that the firm plans to add here over the next several years are expected to be related to Optum, Hernandez adds.

But UnitedHea1thcare is also looking to consolidate a number of other operational functions in San Antonio. Ultimately, between expanding Optum and consolidating other offices here, UnitedHealthcare could bring as many as 150 new jobs to San Antonio, Hernandez says.

Long time coming

The SAEDF has been working with UnitedHealthcare for over a year to get the company to expand its presence in the Alamo City. San Antonio was up against five other cities that the firm was looking at for the purpose of consolidating various operations throughout the country. Those cities were Washington, D.C.; Dunbar, W.V.; Dayton, Ohio; Troy, N.Y.; and Houston.

The real estate was a big factor in UnitedHealthcare's decision to settle on San Antonio, Hernandez says.

"It (Tech Center III) was a new, existing space that (UnitedHealthcare) could move into quickly," says Hernandez.

The SAEDF also was successful in getting the city to grant UnitedHealthcare a six-year tax abatement to cover costs related to the interior finish-out of the property, and new equipment. Over the next six years, that abatement will amount to $170,000, Hernandez says.

"It's not a big number," he continues, "but it was real important to the company that they have the city as a partner. And this is a company that is growing very rapidly."

UnitedHealthcare has committed to adding a minimum of 107 jobs here, but could eventually add up to 150 new jobs here, Hernandez says.

The prospect of new jobs, however, is not the only plus to UnitedHealthcare's latest lease. It is also significant that the company opted to go from a high-rise office to a single-story project like Tech Center III, according to Hank Pruitt, owner of Pruitt Realty.

Tech Center III is owned by Dallas based companies CMC Commercial Realty Group and Today Realty Advisors Inc.; says Pruitt, who represented CMC and Today Realty on the lease. Pruitt's firm also manages Tech Center III, as well as a number of other projects here for CMC and Today Realty.

Pruitt describes CMC/Today Realty's projects in the Alamo City as tech space. The definition refers to a type of industrial project that contains many of the features of traditional office spaces including extensive architectural and landscaping work and high parking ratios. "(The UnitedHealthcare lease) is a real indication of the acceptance of this product," Pruitt says. "What's happening is we build (these tech buildings) and they're being leased."

That success has prompted CMC and Today Realty to decide to move forward with plans to develop another 150,000 square feet of tech space in Northwest San Antonio, Pruitt says. He declined to be more specific about target sites for the planned development, however.

To date, CMC and Today Realty have 481,912 square feet of tech space on the ground - which translates into a $47 million investment in the Alamo City, Pruitt says. With the recent lease of Tech Center III, all of CMC/Today Realty's buildings in the Alamo City are now 100-percent leased.

Industrial projects like CMC/Today Realty's tech centers continue to be a popular alternative for many office tenants, Pruitt and others say.

'To day's economy demands that decision makers take a good, hard look at facilities costs," says Kimberly Gatley, director of market research for REOC Partners Ltd. She adds that these spaces are especially conducive to back-office/ call-center type functions.

The leasing of Tech Center III follows a recent move by local health-care product manufacturer Kinetic Concepts Inc (KCI). Late last year, the company signed a multi-year contract to take 60,000 square feet in University Park Tech Center N _ an 88,520-square-foot tech center that is located next door to Tech Center III. KCI also has an option to lease the balance of the building, Pruitt says. Says Gatley, referring to CMC/Today Realty's plans to develop more tech space: "Considering their success factor so far, I would do it too."