San Antonio Business Journal – by Tricia Lynn Silva

One of the city’s leading investors in office properties has unveiled a plan to bring some new exposure to his portfolio

Rick Rodriguez says he plans to give away up to 2,000 square feet of office space, for a duration of 18 months, at The Brass Professional Center.

The winner will have the opportunity to sign a lease for any length of term, for any size space, at the Brass Professional Center — with the idea being that for the next year and a half, 2,000 square feet of that space will be leased to the tenant at no charge.

The Brass Professional Center — formerly known as Centerview Crossing — spans 80-plus acres along Loop 410 and Callaghan Road in Northwest San Antonio.

Rodriguez purchased the office park in 2006 through his local investment venture Brass Real Estate Funds.
The winning tenant will be chosen on Nov. 18, adds Rodriguez, who is the founder Brass Real Estate Funds and brokerage firm Magi Real Estate Services.

The winner will be drawn from a list of registrants who sign up for the offer, explains Ryan Harrison, vice president of leasing services for Magi — which provides the leasing, property management, development and construction services for Brass Funds’ assets.

“We have tenants applying from all across the city,” says Harrison, who adds that the prize is valued at $68,000.

While some of those participants are larger firms looking to get 2,000 square feet of their office space for free for the next year and a half, there are some smaller tenants vying for the prize as well.

So what if the winning tenant is one looking to ink a deal for less than 2,000 square feet?

Then that tenant just garnered free rent for 18 months, Harrison says.

Up front investment
If $68,000 seems like a big chunk of change to invest in a tenant, then consider the source.

Since establishing Brass Funds in 1996, Rodriguez has accumulated a portfolio through these funds that boasts more than 2 million square feet of commercial real estate — valued at some $230 million. Much of that space is right here in San Antonio.

Rodriguez’ investors in the Brass Funds have included such institutional investors as Horsham, Pa.-based Capmark Finance Inc., which was Brass’ partner in the Centerview/Brass Professional Center purchase.

In fact, this past January, Rodriguez formed a new Brass Fund. Known as the Brass Opportunity Fund, the venture’s focus is on purchasing “quality real estate assets from owners facing liquidity traps caused by the upheavals in today’s credit markets,” Rodriguez explains.

“(Rodriguez) always told me: ‘There’s good deals being made in every single market,’” Harrison says.

The upcoming giveaway at Brass Professional Center, for example, is serving as the kickoff to a broader program that Rodriguez has put into play at two other local office properties as well.

Besides Brass Professional Center, the “new tenant stimulus package” program, as Harrison describes it, includes North Central Side properties The Atrium at 85 N.E. Loop 410 and the building as 10010 San Pedro Ave.

Tenant lures
At all three buildings, new tenants will have the opportunity to choose from various incentives — from a few months of free rent, to paid moving expenses, to free voice and data services, Harrison says.

“It makes sense for everyone,” he says. “We only succeed as landlords if our tenants succeed in their respective businesses. This tenant stimulus package is just an extension of our values as a landlord.”

It’s this philosophy that prompted a collaborative office program launched this summer at Brass property The Atrium. The pilot program brought together three one-man operations in one 1,000-square-foot space, says Erik Darmstetter, founder and CEO of SalesBy5, which handles public relations for Brass and Magi.

The firms were Pear Analytics, Third Party Code and Brand Stack.

Fast forward a few months later, there are now 12 employees spread out over the three firms, and the companies are looking to upgrade to a new collaborative space of between 2,500 and 3,000 square feet, Darmstetter adds.

Rodriguez is now expanding this program to 10010 San Pedro and the Brass Professional Center.
The up-front investments to lure new tenants appears to be working.

Consider the occupancy rates at all three buildings: Brass Professional Center is now 88 percent occupied; 10010 San Pedro, 85 percent; and The Atrium, 92 percent occupied.

The trick has been to stick with the formula for ownership that Rodriguez put in place about five years ago — back when the market was booming.

Sums up Harrison: “Cater to the business operations needs of our tenants.”

The office market may be less dynamic these days, but it is still the role of Brass and Magi to work to not only get tenants in the door, but to help them stay in business, and stay at Brass’ properties — ideally leasing more space as the business grows.

The goal, says Harrison, is to make sure these tenants stay in business and stay with Brass.
“That costs a lot less than finding new tenants,” he adds.

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