Investment Overview

Marcus & Millichap is pleased to exclusively offer for sale, the two-story, multi-tenant medical office building at 11515 Toepperwein Road (the "Property"). The Property has a gross building area (“GBA”) of 18,176 square feet and a gross leasable area (“GLA”) of 14,956 square feet per the rent roll, which is reflective of suites leased at useable square footage and not rentable square footage. This provides buyers the opportunity to potentially increase the GLA by adding a common area add-on factor to increase square footage and subsequently rents. The Property sits on 1.288 acres in San Antonio’s NE submarket with a parking ratio of 4.41 per 1,000 square feet. It has a total of five suites, two of which are occupied providing for a current occupancy of 51% (GLA). Leases are NNN. The weighted average rental rate of the existing leases is $22.07 per square foot (GLA) with a weighted average lease term of 6.7 years remaining for the two occupied suites. The medical office market in the immediate area consists of roughly 37 properties totaling about 482,000 square feet. Per Costar, these properties have a combined vacancy rate of 2.7% and an average market rent of $25.74 per square foot as of March 2024. Market absorption has been positive over the last 24 months with almost 79,000 square feet being absorbed in the last 12 months. With no new construction currently under way and only 76,700 square feet delivery in the prior period, occupancy should remain consistent with current levels with positive rent growth seemingly inevitable. The Property is perfectly suited for either investors or an owner/user. Based on the attached investment analysis, investors can acquire this value-add opportunity with $1,400,000 down, based on a loan-to-value ratio of 55%. For investors seeking a hold term in excess of 3 years, it would make sense to refinance the Property at the end of the second year and capitalize on lower interest rates and increased cash flow. For owner/users, the Property provides the ability to mitigate holding costs by having the other tenants help offset operating expenses and debt service, providing the owner the opportunity to enjoy an “owner’s equivalent rent” substantially below market average.