SAN ANTONIO—Laguna Beach, CA-based Dornin Investment Group (DIG) has acquired Parkway Plaza, a five-building, 189,388-square-foot office park in the North Central submarket, the firm exclusively tells GlobeSt.com.

The 91-percent leased property sits on a total of 13.7 acres directly north of San Antonio International Airport and adjacent to the newly completed Wurzbach Parkway.

DIG aims to benefit from “stable high yielding annual cash flows” and the value-added upside that is available through the lease up of current vacancy, and increasing rental rates upon lease expirations. In-place rents at the property are approximately 10 percent below market rents. The property's stable cash flow is derived from three large tenants who occupy 42 percent of the property. These tenants' average remaining lease term is approximately five years, with the largest tenant, J. Crew, expiring in 2021. In addition to recognizing cash-flow opportunity, DIG also identified the steadfast evolution of San Antonio's business friendly economy which has allowed the city to endure both market upswings and downswings.

Noticeable leasing activity has already occurred since the property was acquired. Existing tenant Computer Solutions completed a 16,890-square-foot renewal and 1,810-square-foot expansion while BMC Corp. completed a 2,317-square-foot renewal for 24 months. Furthermore, Yates Construction is in negotiations to renew its 7,200-square-foot space expiring at year-end.

“We are excited to return to the San Antonio market especially with an asset we have previous experience owning and managing,” Chris Dornin, president and founder of DIG, told GlobeSt.com. “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.”

Financing was arranged in-house by Scott Botsford through Colony Capital.

 “This is our third acquisition financing with Colony in the last eight months,” Dornin says. “Much like our first two transactions, they provided a great structure to accomplish our business plan and closed in less than 30 days.”

DIG has retained Transwestern to both manage and lease the property.