AP-Knight's broker Todd Mills, senior vice president in CB Richard Ellis' San Antonio office, reportedly had spent several months in negotiations with an Austin investment group that wanted the package, bound by Centerview, Piedras and Woodcock drives and Loop 410. The portfolio subsequently was offered to some original bidders, which included Brass Real Estate Funds' managing member Richard Rodriquez.
"He had made a hard run at it from Day One," Bryan Leonard, senior vice president and branch manager for Capmark's Austin office, tells GlobeSt.com about the win. "It will be the biggest transaction in San Antonio this year in terms of size and dollar amount in this market." He can't discuss the price, but the deal went full circle in less than 60 days with Rodriquez "performing under the terms of the sales agreement," Leonard explains as added insight. "It was important to the buyer and the seller to meet the timelines."
Rodriquez didn't return telephone calls to comment on the deal although he said in yesterday's press release that he felt the price was below market value. He pegged it at less than 50% of the replacement value.
Leonard, who structured the debt and equity financing, says the chief selling point for the near 75%-leased Centerview Crossing is its location and size. "It's hard to find a 70-acre infill parcel intact like that," he says. "It's the largest office property in town." It's also just a five-minute drive to the medical district, USAA campus, Valero Energy Corp.'s headquarters and the National Security Agency's largest training facility outside Fort Meade, MD.
Leonard says the deal closed with a short-term, Libor-based, floating-rate loan that included a cap-ex reserve for cosmetic upgrades and lease-up. "The business plan is flexible to accommodate a lot of scenarios," he explains. "The partnership has the mind operationally to take advantage of all market opportunities." He says there are no plans to flip any buildings, but he didn't rule out piecemeal sales down the road for what could be a relatively short hold.
Leonard added that the new owner is facing some lease rollover, but not for a couple years. The mid-rise office buildings, developed from 1969 to 1999, house more than 6,000 employees. The tenant roster includes Wells Fargo Bank, Aetna Life Insurance Co., Northrop Grumman Corp., Chevron Corp., Compass Bank, the Social Security Administration, Department of Defense and several other government agencies.
Until the sale, the park was leased by Parthenon Realty LLC of Alpharetta, GA, but the Brass Real Estate's affiliate, Magi Real Estate, is taking over leasing and management. During the course of the marketing, one building was razed. "I don't see teardowns for anything else," Leonard says.
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