Fortunes continue to split between Class A office owners and everyone else.
KBS, a California-based private equity firm, scored Wells Fargo as a tenant at its City View office building in San Antonio. The lease for 44,000 square feet, two floors of the building, brings it to 96 percent occupied.
“While challenges in the general economy and areas of the office sector persist across the country and in San Antonio, KBS is observing positive signs in the area,” said Giovanni Cordoves, western region president at KBS.
San Antonio’s vacancy rate and asking rents are lower than those of other Texas cities, he said.
The 10-floor City View, at the corner of Interstate 10 and Huebner Road in northwest San Antonio, is one of several Alamo City offices to fill up in recent weeks as high-end buildings continue to attract tenants.
The building, at 10999 I-10, was constructed in 1986 and spans 221,300 square feet. That means Wells Fargo’s lease covers about 20 percent of the building. The bank plans to move in toward the end of the year after KBS completes a renovation of the two floors.
Lindsey Tucker of Partners Real Estate represented KBS, while Avison Young’s Mark McGranahan and Steve Garza of Partners’ Real Estate represented Wells Fargo.
KBS recently negotiated an extension on a $613 million loan held by one of its real estate investment trusts. That loan is backed by six office properties, three of which are in Dallas-Fort Worth, including Legacy Town Center in Plano. As the company managed to hold on to those Texas offices, it handed back the keys at 201 Spear Street in San Francisco.
The office vacancy rate in San Antonio reached 17 percent at the end of the third quarter last year, putting it slightly lower than tech-dependent Austin in the north. Sublease availability climbed to almost 1.2 million square feet in that same time, according to JLL. Still, overall absorption was positive, as Class A buildings lease better than shabbier options.
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