SAN ANTONIO-A San Francisco-based investment group has hawked its only office property to a local buyer for $4.4 million. The sale closes out a yearlong re-tenanting drive for the 75,012-sf Summit Tower, which had to overcome a move-out that dragged down occupancy to 28%.

At sale time, the 5835 Callaghan Rd. building’s roster was up to 18 tenants and 61% occupancy, Vicki Cade with Grubb & Ellis Co. in San Antonio tells She says the IRS, a 30-year tenant, had occupied the lion’s share of the building, but wanted an extra 10,000 sf on the first floor of the six-story building when it came time to renew. “This building could not accommodate that,” she explains.

According to Cade, five-year owner Summit Properties LP then decided to prune the only office holding from its multifamily-weighted portfolio. Summit Tower was on the market at least one year despite its positioning in a dense office and retail corridor in the northwest submarket, a high-growth pocket for middle-income residential and commercial product.

The class B building’s high vacancy got the blame for long market run. “Once we got to 60% occupancy, we did get offers, but this was the offer from a timing standpoint that worked,” Cade says.

The winning offer fell $500,000 below the $4.9-million ask, with Fredericksburg Condo Partners pocketing the win. The new owner was represented by Trey Bishop and James Foreman with REOC Partners in San Antonio, which also gets to lease and manage the 2.66-acre property. “It’s a nice small tenant building in a good location,” Cade says. “They should do very well with it.”

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