SAN ANTONIO-Cole Real Estate Investments has made its first office acquisition in the Alamo City, paying $32.8 million for a 142,000-square-foot, class A office property leased to Medtronic Inc.
Cole bought the property in an off-market transaction from a joint venture comprised of Transwestern Commercial Services and Lincoln National Corp. The property, located in The Rim mixed-use development in northwest San Antonio, was built in 2008 as a speculative project. However, Medtronic leased the entire building prior to completion, turning it into a quasi-build-to-suit, according to Boyd Messmann, senior vice president of acquisitions for Cole.
Medtronic, which manufactures medical devices, initially signed a short-term lease for the facility until the parking could be expanded, Messmann notes. Once that occurred, the Minneapolis-based company inked a long-term lease. The remaining lease term is roughly 10 years, with two, five-year renewal options.
The mission critical office facility, which is LEED Gold certified by the US Green Building Council, has the ability to house more than 1,200 Medtronic employees. It provides a high-end, 24-hour customer support center. “We like Medtronic’s credit and the fact that the company is the leader in its industry,” Messmann says, pointing out that Medtronic is rated ‘AA-’ by S&P and‘A1’ by Moody’s.
Messmann tells GlobeSt.com that Cole completed its due diligence and closed on the building in about 40 days. “There was a tight timeline because the construction loan was coming due, and Lincoln National had to either sell or refinance the debt,” he explains.
In addition to the building quality and Medtronic’s credit, Cole was attracted to the San Antonio market because of its stability and lack of class A office product, Messmann says. “That made the investment very compelling to us,” he adds.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
