San Antonio’s industrial sector continues to heat up following the 2008 economic downturn.
One of the latest examples — Stream Realty’s investment in a product that, ironically, cools things down.
The commercial real estate firm, which owns 2 million square feet of industrial space in San Antonio, just added more than 400,000 square feet to its portfolio through a trio of acquisitions. One of those buys is the former Sysco warehouse at 5711 FM 78, which includes nearly 170,000 square feet of refrigerated and freezer space.
Stream’s Managing Director Jason Schnittger said the space has been sitting vacant for the past few years because “it’s a very unique facility, and a lot of people looked at it and didn’t know what to do with it.”
“Usually buildings fit in very specific categories — hotel, restaurant, office, warehouse … but cold infrastructure is very different,” he said of the space. “Conceivably, we could tear all of that out and be left with a warehouse, but there is significant demand for cold spaces.”
Steam has been watching the industrial market tighten in the aftermath of the recession, and saw this space as a way to get a large block of warehouse space at a significant discount. As the property sat on the market, Sysco continuously dropped the price from its initial $15 million — until it got to the point at which Stream considered it “an aggressive deal.”
“We viewed it as a strategic acquisition,” Schnittger said. “We’ve studied this type of product across the country and state, and found it to be in very high demand but low supply. If you’re looking for freezer or cooler space, there are very few options regionally, and specifically in San Antonio.”
Stream also has acquired sites at 5246 Tacco Drive and 5235 Tacco Drive, a truck maintenance and warehouse facility, respectively.
The firm will be putting in $2 million in renovations for all three sites — including paint, concrete repair and landscaping upgrades.
“Stream is really just putting on some lipstick to make the buildings more attractive and do the repairs required because it sat vacant for a while,” Schnittger said.
Marketing for the property has already kicked off, and because Stream is offering a leasing option, it has already received some initial interest in taking over the space.
“This is a space we’re very comfortable in and track closely,” Schnittger said of Stream’s future in the industrial market. “We’re focused on getting our business plan kicked off with the improvements and really ramp up marketing (for the latest properties), but we still have our fishing line in the water looking for office, industrial and retail acquisitions.”
By: Katie Burke, San Antonio Business Journal