An office property on San Antonio’s Northwest Side is more than 90 days delinquent on its $57 million loan.
Brass Real Estate, whose CEO is Rick Rodriguez, is in default on the Brass Professional Center at 4400 Piedras Drive, the San Antonio Business Journal reported.
While the loan doesn’t mature until 2030, the months of failed payments put Brass at risk of foreclosure. At least $12 million is still owed. The debt has been transferred to special servicer LNR Partners to help the firm work through the default.
The 140,000-square-foot building is 71 percent leased, down from 85 percent in 2020, before the pandemic pummeled office properties across most of the nation. With rising operating costs and increased vacancies, the building hasn’t generated enough income to cover its debt payments for years.
San Antonio and other Texas cities have withstood the pandemic-fueled remote work movement and office distress better than most other major markets around the country. But the Alamo City still has a long road to recovery ahead, Rodriguez told the outlet.
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“Some of these office buildings are going to become climatized storage,” he told the outlet. “Some of them are going to become charter schools. Some of them are going to become all types of different things other than office.”
In addition to the challenges facing the office market, Brass Professional Center has been hurt by its location. The building is next to the South Texas Medical Center, where spec office properties that serve the medical industry are performing well. However, it’s on the wrong side of Loop 410, preventing easy access to an array of amenities in the medical center, such as retail and entertainment options.
—Quinn Donoghue