A community development entity turned to adaptive reuse of a historic building for its headquarters in San Antonio.
TransPecos Development completed a multimillion-dollar renovation of the 62,900-square-foot Merchants Ice Building at 1305 East Houston Street. The building had been vacant since 1999, and it’s now about 60 percent occupied by tenants including itself and its affiliates, TransPecos Financial and Kennedy Sutherland law firm, helmed by Patrick Kennedy Jr.
JLL’s Robert McDonough is handling leasing.
The former industrial building is the largest on the seven-building campus developed by VelocityTX, a life science nonprofit formerly known as the Texas Research & Technology Foundation. It is located in the city’s East Side Innovation District.
About 8,100 square feet is available on the third floor of the Merchants Ice Building, and spec suites spanning 17,500 square feet are under construction.
Built in the early 1900s, the red-brick building was updated with rooftop tenant lounges, green space and upgraded HVAC systems.
“It ultimately is a new build, for all intents and purposes, just with more character,” McDonough said.
The building’s taxable value increased from $4.36 million in 2023 to a proposed $10.1 million after the renovations, according to the Bexar Appraisal District.
The move consolidated TransPecos’ growing network of legal, finance and consulting affiliates under one roof.
San Antonio’s downtown office market has been sluggish amid elevated borrowing costs and post-pandemic workplace shifts.
The city’s overall market recorded negative net absorption of over 102,000 square feet in the first quarter, with demand concentrated in newer Class A properties, according to CBRE.
Downtown had the highest total vacancy behind the Northeast submarket at 27 percent, nearly 45 percent for Class A, but still managed to post modest positive absorption largely from tenants upgrading into trophy assets. Asking rents for top-tier space in the urban core can reach up to $65 per square foot even as average lease rates are pulled down by lingering availability in older buildings.
Adaptive reuse projects stand out in leasing campaigns across Texas, especially when bundled with tenant-centric amenities.
The broader VelocityTX campus launched in 2017 as a life sciences and tech-focused redevelopment. Five of its seven buildings are operational, with the full site expected to house about 300 workers.
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