San Antonio Class B office nabs tech tenant 

As trouble comes even for Class A offices, an aging building notched a new lease in San Antonio.  

Codeup, a technology education firm based in San Antonio, signed a 33,000-square-foot lease at 8700 Tesoro Drive. The building, called Onyx at the Airport, belongs to Salem, Oregon-based Windmill Investments, which also owns a neighboring office building — together, the two are called the Petroleum Towers.

The building, constructed in 1974, features 241,000 rentable square feet, with a going rate of $17.50 per square foot, according to Loopnet. According to Windmill’s website, the building was just 66 percent occupied when it bought it. Codeup is a new, techier direction for the building, whose anchor tenant is the Alamo Area Council of Governments. 

The properties sit on 9.3 acres just off Loop 410, not far from several residential neighborhoods including Alamo Heights. As part of Codeup’s lease, the company will take over a 42-foot-tall atrium in the building and use it for meetings and events. Codeup will also set up classrooms in the building.

JLL’s Meredith Muecke Howard and Robert McDonough represented Windmill, while Andrew Price and Daniel Wall of CBRE repped the tenant. 

Founded in 2004 by investor Daniel Carter, Windmill owns several San Antonio office and multifamily properties, including the Peanut Factory Lofts in downtown and 1800 Plaza near the airport. 

Codeup has run technology bootcamps and education programs teaching customers to code since 2013. 

The Petroleum Towers originally belonged to real estate tycoon James Cotter. After his death, much of his estate fell into bankruptcy, and Windmill acquired the buildings at auction in 2019. It also bought Cotter’s Alamo Towers, nearby at 901 and 909 NE Loop 410. At the time, Carter told the San Antonio Express-News that he had bid $15.7 million for the Petroleum Towers.

After acquiring the buildings, Windmill spent a little over $2 million to renovate the property’s HVAC systems, elevators, roof and parking lots. For now, the investments appear to have paid off. 

San Antonio’s office market suffered nearly 90,000 square feet of occupancy losses in the closing quarter of 2022, with most of that bleeding concentrated in the city’s Class B and C buildings, according to a report from JLL. Vacancy ticked up to nearly 20 percent, its highest level since at least 2008.