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Challenge
Sonterra Medical Park, a three-building portfolio totaling 120,000 square feet, was acquired at 68% occupancy. Previously owned by a utility company’s pension fund, the properties were well-maintained but lacked the creative leasing strategies needed to attract healthcare tenants. Large spaces, ranging from 4,000 to 8,000 square feet, were left unoptimized for modern medical practices. Recognizing the need for a repositioning plan, Stream, in partnership with its equity partner, acquired the portfolio to stabilize and enhance its market position.
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Strategy
Stream devised an aggressive lease-up strategy, incorporating location analytics to identify healthcare tenants most suited to the available spaces. The team implemented a series of spec suites and worked with tenants to improve their individual spaces, making the property more attractive to prospective tenants. By leveraging GIS data, Stream identified gaps in provider coverage and tailored marketing campaigns to attract high-potential tenants.
Outreach efforts highlighted Sonterra Medical Park’s strategic location, spec suites, and amenities tailored to meet healthcare tenants’ needs. Stream also implemented targeted capital improvements to enhance the functionality and appeal of the portfolio, aligning the properties with healthcare tenant requirements.
Results
Stream successfully increased occupancy from 68% to 93% within two years. By focusing on tenant needs and leveraging GIS-driven targeting, Stream secured leases with healthcare providers that brought stability and growth potential to the portfolio. The tenant mix included primary care providers, specialty clinics, and ancillary healthcare services, collectively enhancing the market position of Sonterra Medical Park.
The repositioning culminated in a highly profitable sale to Healthcare Realty, the largest healthcare REIT in the country. This transaction marked the most lucrative deal executed by Stream’s San Antonio office, highlighting the impact of data-driven marketing and operational excellence in transforming underperforming assets into high-value investments.
