Dogwood Commercial Bets on San Antonio Office Investment

Dogwood Commercial is taking a swing on San Antonio’s office market at a time when many investors are steering clear of the struggling asset class.

The Dallas-based firm has purchased San Pedro Plaza, a nine-story office building on the city’s North Side, near the North Star Mall, the San Antonio Business Journal reported.

Terms of the deal weren’t disclosed, although Dogwood took out a $14.7 million loan to help fund the acquisition, according to Bexar County records. The 163,000-square-foot building, at 7330 San Pedro Avenue, is valued at roughly $20 million, according to 2024 tax records. The loan amount comes to $90 per square foot.

The seller, California-based Buchanan Street Partners, had owned the property since 2015 and listed it for sale in May of last year, with JLL handling marketing. Buchanan invested about $4 million on renovations between 2016 and 2022. The building was 83 percent leased at the time of listing, which is on par with the San Antonio average of 83.5 percent, according to Cushman & Wakefield’s first quarter report.

While the broader office market continues to struggle amid the remote-work era and high interest rates, San Antonio’s North Side has seen an uptick in leasing activity due to recent flights-to-quality trends, characterized by companies favoring updated, amenity-filled office properties.

With the Midtown submarket nearing capacity, the overflow is now extending into the North Central area. The submarkets’ vacancy rates stand at 9.4 percent and 16.8 percent, respectively, the outlet reported, citing CBRE’s first quarter data. For comparison, vacancies in the downtown area are hovering around 20 percent.

There have been very few notable office transactions in the Alamo City since last year. High interest rates and tough lending standards have contributed to the sales slump.

Earlier this year, weak demand prompted Endeavor Real Estate Group to divide a three-building office complex on San Antonio’s Northwest Side into three separate listings. Endeavor had been trying to sell the complex as a whole for almost two years.

—Quinn Donoghue