Downtown medical office heads to auction

More signs of San Antonio’s struggling downtown commercial real estate market emerge.

Harrison Street will auction off the Rosa Verde Towers, an 11-story, 141,000-square-foot medical office building at 343 West Houston Street, in April, the San Antonio Business Journal reported. 

The Chicago-based investment firm will start the bidding at $1.25 million. With 15 percent occupancy, most of the property’s value is in the dirt.

The Bexar County Appraisal District valued the building at $2.7 million in 2022. The land, which includes an attached parking lot, appraised at $7.9 million, the outlet said. The 2.8-acre property has 78 years left on a 100-year ground lease with Christus Health. There are five 10-year renewal options at the end of the term. 

The Rosa Verde Towers has been a largely unprofitable asset since the pandemic caused downtown office vacancy rates to soar. With very low occupancy, it has netted $426,000 in losses over the past two years, the outlet reported. A net loss of $185,000 is expected this year. 

The property underwent a $27 million renovation in 2018 under previous owners Ackerman & Co., Artemis Real Estate Partners and MLL Capital. Renovations included upgraded common areas and elevators, as well as a repainted exterior and replaced roof.  The Christopher Merrill-led Harrison Street bought the property in 2021, the outlet said. 

Bidding is scheduled to begin April 17 at 11 a.m. and close on April 19 at 11 a.m.

Many of the city’s office tenants began moving northwest last year because of the abundance of amenities in that area, including commerce centers like La Cantera and the Rim, as well as the lively economy revolving around the University of Texas at San Antonio campus.

—Quinn Donoghue