Harris Bay wants out of San Antonio’s struggling office sector as it looks to offload a 120-year-old downtown property.
Jake Harris’ firm has listed the eight-story Commerce Building, at 314 East Commerce Street, for $5.35 million, the San Antonio Business Journal reported. Cody Lockwood and Jon Angel of Lockwood Realty Group are marketing the property.
Harris Bay bought the 39,831-square-foot building for $2.8 million in 2017, and the firm took out a $5 million loan on it from Verus Mortgage Capital in 2021, according to Bexar County records. It’s unclear what the remaining balance is.
The Commerce Building has an assessed value of $4.45 million, the outlet reported, citing 2023 tax records. It has a dismal occupancy rate of 44 percent, well below the city average of about 82 percent, according to CBRE.
A buyer could repurpose the building, which was constructed in 1902 and is a block from the San Antonio River Walk. Its zoning allows for a variety of uses, and a recent report from the National Bureau of Economic Research identified it as one of the top 20 properties in San Antonio suitable for a residential conversion.
This offering comes amid a broader pullback by Harris Bay in San Antonio. A downtown boutique hotel project that Harris Bay had planned to start this summer remains undeveloped. The company recently sold its ownership stake in the Travis Building, a former office building that it converted into 63 apartments in 2022. And the firm is selling land it owns at 1226 East Cesar Chavez Boulevard.
There haven’t been many office properties to change hands in the Alamo City this year, as many investors are steering clear of an office sector that’s taken a beating from the pandemic-driven remote work movement, rising interest rates and wary lenders making it tough for landlords to refinance their assets.
Earlier this week, special servicer LNR Partners paid a little more than $31 million for the 11-building Brass Professional Center on San Antonio’s Northwest Side, after the owner defaulted on a $57 million loan. Separately, Investcorp snagged an assemblage of low-rise office buildings near the San Antonio airport in August, using a $36 million loan to help finance the purchase.
—Quinn Donoghue
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