5/20 San Antonio Site Visits

The Friedrich Building

Patrick Shearer, the listing broker, was nice enough to show us around this historic structure that is currently occupied by a few small offices. The building was formerly the main production facility for Friedrich Refrigeration Company. The property is a combination of many structures that were built as the company expanded. In its current state, it has a total of 533,000 square feet between all of the structures and all four floors includingwthe heavy duty lifts designed for forklifts and materials. The six acre site is currently listed for 8 million. It would be an interesting adaptive reuse structure that would present many challanges that are unique to this specific project. The main issue is that many of the structures are in disrepair and would require extensive work in order for them to be granted a certificate of occupancy for any use. A developer could purchase the property and do selective demolition to provide the interior of the building with windows and effectively be able to convert the vast space into condo’s or apartments. Another less demolition intense idea would be to continue the conversion to office which is still less than 5% complete. The work was begun ten years ago and it would be possible to pick up where the last developer left off. Ideas to turn it into a mixed-use facility would result in the various challenges that other historic brownfield developments encounter. The area would be the main challenge that is typical with this type of repositioning. Multi-use zoning changes would also be required. The developer would have to work with all incentives possible to make this project feasible and perhaps the city would provide additional help through a public private partnership. In any event, this project has many unique challenges for its next owner. Their taking offers now. This could be a gold mine for someone with some spare equity and the confidences to do an extreme version of the typical value add play.

Alamo Architects

The owner of Alamo Architects, Mike McGlone, was kind enough to show us his LEED certified office, which is a completed brownfield repositioning. They were successful in achieving a LEED silver rating and estimate that they save about 30% on their operating expenses because of the buildings efficiency. The architects in this firm are very knowledgeable about LEED now, but most of them were turning over a new stone when they began this project. Needless to say, it was a learning experience for most of them. They were very successful in achieving their set goals and actually recycled 95% of all materials that would have otherwise gone to the dump during constructions. All of this was done by only adding 7% to the overall construction cost. They also only paid $6k for their actual LEED “test” which is far less than other commercial structures often pay. They estimate that most LEED projects take 3-10 years to pay back their extra construction costs through operating expense savings and that this only costs 1-8% more up front. In addition to energy efficiency systems, they have everything from rain water recycling to condensation collection to save on water costs. This infield development was said to be relatively straight forward compared to others that the company had experience with. They have occupied it for three years and continue to be satisfied with the unique structure.

Marty Wender Meeting

Mr. Wender was nice enough to have us to his office and buy our whole class lunch. He had a lot of great advice and it didn’t cease, nor cease to amaze me the entire time we were in his presence. He say’s that his job as a developer is to simply “sell dreams.” This is interesting because he focus’ on developing land and selling plots by utilizing the highest and best use. He talked about how new areas that he developed seemingly have no zoning because he creates the whole development out of nothing. He is adamant about providing quality infrastructure and has given back to his community in this way for his whole career. He is a straight shooter and says that he likes to do things right the first time rather than passing the buck to the city when the public spaces are deeded back. He has done everything from Sea World, to data centers, to single family houses. He stressed how getting in with everyone from the community organizers to politicians has been helpful to his career and ultimately his reputation. He is extremely personable and believes that this attribute has gotten him to where he currently is. One of the top developers in San Antonio with international ties to equity partners and fellow real estate moguls around the world.

San Antonio River Authority

Our tour of the new part of the San Antonio River Walk, which is operated by the San Antonio River Authority, provided insight into the new vision of the area as an amenity for residents rather than purely a tourist attraction. The 1.3 mile stretch of river that we walked is catered by a water taxi. A lock was required in the middle of this section due to the substantial rise in water height that occurs over the stretch. This area used to be inhabited by vagrants, but now the river area has been completely redone and sidewalks and landscaping cover both banks. The years of hard work that was put into this project provides the city with a section of river which is primarily focused on a public attraction and is much less commercial than the old boardwalk attraction that tourist have come to know the city for.