Big-Dollar Investors Purchase Three Major San Antonio Commercial Properties
Overview
In a move signaling growing confidence in the San Antonio commercial real estate market, three major commercial properties in the city have been snatched up by big-dollars investors. This includes a nine-story office tower near North Star Mall, a shopping center on the Northwest Side, and a cluster of shopping centers along Interstate 10.
The Purchases
The Dallas-based real estate firm, Dogwood Commercial, on April 17, purchased the 164,000-square foot San Pedro Plaza office tower at 7330 San Pedro Ave. The firm, known for its unique approach in transforming “undervalued” properties into “high-performing” ones, acquired the property for an undisclosed price. According to County deed records, Dogwood took a $14.7 million loan from Frost Bank to facilitate the purchase. The building, which was 90% occupied at the time of purchase, is set to undergo renovations this summer.
Just a few weeks later, Dogwood made another investment in San Antonio by purchasing the Ingram Place shopping center at 3235 Wurzbach Road. The 44-year-old shopping center, with a floor area of 52,000 square feet, was also bought for an undisclosed price. The Bexar Appraisal District has valued the center at $6.5 million this year.
Adding to this commercial real estate flurry, the Colonnade, a cluster of shopping centers on the Northwest Side, was bought in March by a joint venture between local real estate firms, Headwall Investments and SageView Partners. The cluster, home to well-known tenants such as Firehouse Subs, First Watch, and HoneyBaked Ham Co, has a total of nearly 127,000 square feet of space across 5.4 acres.
Market Update
San Antonio’s retail market has shown resilience in the face of the COVID-19 pandemic, achieving an impressive occupancy rate of 96% in the fourth quarter of last year. Reports suggest this has been largely due to a surge in travel and leisure activities locally, with 2023 being the record-setting busiest year for San Antonio International Airport. The local office market, however, is still grappling to gain ground, absorbing only about 14,000 square feet of vacant space in Q1 2024.
However, a ray of optimism shines for the local office market with the recent announcement that global software giant Oracle has doubled their leased space in the Spectrum building at 613 NW Loop 410 on the North Side. The company’s decision to up their footprint to 34,000 square feet across two floors is seen by many as a positive signal towards the re-occupancy of office spaces in key markets like San Antonio this year.
Impact and Potential Effects
The recent purchases by high-dollar investors and Oracle’s decision to expand its office space are promising indicators for the San Antonio real estate market. The investors’ confidence in purchasing and renovating these commercial properties may set a precedent for further real estate investment in the area. Future tenants, retail or office-based, can look forward to upgraded, high-performance spaces in prime locations. Ultimately, these transactions mark significant strides in the ongoing recovery and growth of San Antonio’s commercial real estate market.
