Dornin Re-Invests in San Antonio
- Sep 22, 2015
Laguna Beach, Calif.-headquartered Dornin Investment Group (DIG) has acquired Parkway Plaza, the five-building office park located in the North Central submarket of San Antonio. Financing was arranged by Scott Botsford through Colony Capital.
“This is our third acquisition financing with Colony in the last eight months. Much like our first two transactions they provided a great structure to accomplish our business plan and closed in less than 30 days,” said Chris Dornin, president of DIG. Transwestern will be responsible for the management and leasing processes of the property.
The 189,388-square foot office sits on 13.7 acres of land north of San Antonio International Airport. It provides easy access to Stone Oak Alamo Heights and is adjacent to the newly completed Wurtzbach Parkway, the meeting point of US 281 and IH 34.
DIG’s goal is to benefit from stable high yielding annual cash flows and value-added upside available through the lease up of current vacancy and increasing rental rates upon expiration. The property, which is currently 91 percent occupied, has average in-place rates approximately 10 percent below market rates and its stable cash flow comes from three large tenants who occupy 42 percent. These three tenants have an average of five more years on their remaining lease terms, while the largest tenant, J. Crew, will face lease expiration in 2021.
Significant leasing activity has already occurred since the acquisition. Existing tenant Computer Solutions renewed its 16,890-square-foot space and even expanded it by 1,810 square feet, while BMC Corp. completed a 2,317-square foot renewal for 24 months. Moreover, Yates Construction is currently in negotiations to renew their 7,200-square foot space expiring at the end of 2015 and add 3,000 square feet more.
“We are excited to return to the San Antonio market especially with an asset we have previous experience owning and managing,” said Chris Dornin. “The location of this submarket sandwiched between the CBD and some of the more affluent residential areas help drive demand for office space. We anticipate the recent declining vacancy and increasing rental rates to continue.”