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SAN ANTONIO-Eyeing a five- to seven-year hold, KBS Realty Advisors has shelled out $23.6 million for the 95%-leased, 174,108-sf Fountainhead One in the northwest submarket. And, the Newport Beach, CA-based investment group is shopping for additional pieces for the portfolio.

“San Antonio has been an attractive market for us for the last 12 to 18 months due to corporate relocations and other positive announcements,” says William Rogalla, KBS Realty’s senior vice president and acquisitions director in the Central US. Fountainhead One, situated at 8200 Interstate 10, fits right into the investment group’s sweet spot for location preference in the region and pricing, he tells GlobeSt.com.

The Glendale, CA-based American Realty Advisors had Transwestern Commercial Services’ Rudy Hubbard and Leah Gallagher courting the market with the listing. “It was a competitive bid process,” Rogalla says, adding he doesn’t know if KBS earned any extra points from the seller although they did recently complete a trade of an office building in Utah. The 10-story Fountainhead One closed with new financing from MassMutual.

Transwestern has held onto the leasing and management with the change in owners, but KBS is starting out with a diverse tenant mix that has little rollover “for the next few years,” according to Rogalla. Its top tenants are the New Horizons Computer Learning Centers, University of Phoenix and Health Care Service Corp. Fountainhead One, with a five-level parking garage, was developed in 1985 and renovated in 2003.

KBS, owner of nearly 7.6 million sf in Texas, now owns three office buildings in San Antonio. And, Rogalla says “we are actively looking for more.” He says the acquisition sweet spot is $20 million to $50 million, with an eye for the northwest submarket, particularly the Interstate 10 corridor.

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