Medical office space in San Antonio

[Christopher Busken]

Investment Info:

Office Space commercial investment investment in San Antonio.

Purchase price: $900,000

Cash invested: $67,500
Sale price: $2,300,000

My business partner and I bought the building with 50% occupancy in late summer of 2018. Renovated two offices over the next 3 years. Increased occupancy to 100%. Converted all the leases to NNN.

What made you interested in investing in this type of deal?

This space was attractive as it is adjacent to growing hospital in the city, and it sits alongside the I-35 corridor from San Antonio to Austin, TX.

How did you find this deal and how did you negotiate it?

This property sat on the market for quite some time. It didn't fit the building profile of the current owners as it was too small for them to really dedicate time to it. Initially they wanted 1.1 million and we came in at $800,000. Finally settled at $900,000.

How did you finance this deal?

We were able to obtain attractive terms (15% down) as I moved one of my offices in as a tenant.

How did you add value to the deal?

One of the office spaces needed new walls, ceiling, and flooring with a cosmetic redesign. The second office space required a more intensive renovation (walls, ceiling, plumbing). We converted the leases to NNN leases and lengthened the duration of the leases.

What was the outcome?

We sold the building to a buyer out of California that was completing a 1031 exhanges.

Lessons learned? Challenges?

This was much easier to accomplish than I ever thought possible.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I recommend using Scott Herbold with CBRE for commercial buildings.