🚨Alamo Colleges District purchased a 210,000 SF two-building office complex with garage in Westover Hills for just under $38 million, targeting conversion into a Northwest Vista College School of Emerging Technologies by Fall 2027. At roughly ~$180/SF before renovation, the reuse pencils below new construction and removes a large vacant block from a metro office market running ~11.4% vacancy. Public, voter-approved bond dollars (2025: $987 million) enable long-horizon, mission-driven absorption—an execution path private office capital often can’t underwrite today.
Purchase price: “just under” $38 million for 210,000 SF (~$180/SF), Sep 2025.
Appraised value: $28.6 million prior appraisal (≈$136/SF).
Metro office vacancy: 11.4% (San Antonio), 2025.
Bond funding: $987 million GO program approved May 2025.
Loan Performance. For private owners/lenders, removing 210k SF of competitive supply modestly supports rent/occupancy trends and DSCR in nearby assets; fewer large-block giveaways reduce negative re-trade pressure. Public purchase avoids refi risk/covenant stress that would face a lease-up business plan.
Demand Dynamics. Tech-skilled enrollment anchors daily footfall in Westover Hills; adjacent data/cyber firms improve internship pipelines and absorption for flex/office supporting vendors. Limited near-term rent-beta, but durable educational demand lowers downtime for complementary space.
Asset Strategies. Conversion prioritizes large collaborative classrooms/labs, IT backbone, and life-safety upgrades; phasing can deliver admin/limited instruction early while heavy MEP scopes trail. Preserve reusable call-center infrastructure (UPS, server rooms) to compress capex.
Capital Markets. Public, tax-exempt capital sets a two-tier bid stack: assets with institutional reuse pathways clear at higher prices than commodity vacancy. CMBS/banks welcome removal of “dark” square footage; limited private debt appetite for speculative back-office lease-ups persists.
Selective office reuse can tighten supply without new deliveries.
Education anchors trade rate-sensitive rent-beta for stable, mission-driven occupancy.
Financing stance: public bonds outcompete private leverage for complex conversions.
Caveat: cost creep in MEP/life-safety can erode the reuse vs new-build delta.
🛠 Operator’s Lens
Refi. N/A for the district, but private holders nearby: evaluate term-out options on stabilized, education-adjacent flex/office; lock caps through maturities where applicable.
Value-Add. Tie capex to teaching/lab sequencing; hold 20–30% contingency for IT, ventilation, and egress changes.
Development. Test-fit floorplates early; pressure-test pro forma at ~$100/SF retrofit sensitivity; phase occupancies to de-risk schedule.
Lender POV. Banks/CMBS favor supply removal; expect limited proceeds for speculative office but stronger tone for edu/health conversions with committed users.
Watch 2026–2027 renovation milestones and any scope inflation vs contingency.
Track follow-on conversions as agencies/schools replicate this template in TX metros.
Risk: entitlement/scope delays or unforeseen MEP rework narrowing savings vs ground-up.
San Antonio Express-News, San Antonio Report
