Ridgemont Properties buys three historic buildings “in a trough”

A prominent real estate investor picked up several iconic properties along San Antonio’s historic Houston Street. 

Ridgemont Properties has acquired three office properties from San Antonio-based private equity firm GrayStreet Partners for an undisclosed price, the San Antonio Express News reported. 

The sale includes the Frost Bros. building at 217 East Houston Street, and the adjoining Bennett and Schaum buildings, at 223 East Houston Street and 225 East Houston Street. 

They collectively span 87,450 square feet and have housed prominent retail and tenants, including Bohanan’s Prime Steaks and Seafood, The Palm restaurant, and the architecture firm Gensler. 

CBRE and Shop Companies are tasked with leasing 5,400 square feet of retail and 17,000 square feet of available office space in the three buildings. 

“It’s irreplaceable real estate that has excellent retail,” said Ridgemont vice president Trebes Sasser Jr. 

The purchase is seen as a positive development for San Antonio’s office market, which has been struggling with high vacancy since the pandemic. However, San Antonio is poised to lead the nation in office rent growth over the next four years, with annual increases of 1.5 percent, according to CoStar. 

Although this forecast is lower than the nearly 4 percent surge in office rents seen over the past year, it remains a favorable outlook for the sector, considering the challenges it has faced.

GrayStreet’s sale marks the culmination of its nearly decade-long involvement with Houston Street, which began in 2015 with the purchase of the Kress and Vogue buildings. Although GrayStreet invested millions into revitalizing these areas, the vibrant commercial hub envisioned by managing partner Kevin Covey never fully materialized.

The firm has divested from several downtown properties in recent years as it redirected its attention to other ambitious projects, such as the Broadway East mixed-use development near Pearl and potential redevelopment plans for the Lone Star Brewery complex.

Ridgemont is betting on the strategic location and historical value of the Houston Street properties to attract businesses, especially as nearby developments like the Alamo Visitor Center and Museum and UTSA’s downtown expansion promise to bring energy to the area.

“We feel like we’re in a trough, and we’re going to be riding that upswing over the next however many years of our holding period,” Sasser said.

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— Andrew Terrell