SAN ANTONIO — Federal Realty Investment Trust has put its seven Houston Street properties up for sale — including the historic Vogue and Kress buildings.

A deal for the real estate would be the biggest the center city has seen in year. It also would mean the end of the Rockville, Maryland-based group's 16-year presence downtown, where it renovated buildings (except Kress), built the the property that now is home to Hotel Valencia and oversaw infrastructure improvements.

“We've done everything that we can to add value to (the San Antonio properties) and now it's time to pass it on to the next group,” said Jan Sweetnam, Federal Realty's Western Region Chief Operating Officer. “We are very happy with our investment and what we've had for the last 16 years.”

Sweetnam said it's time Federal Realty concentrate on its holdings on the East and West coasts.

Back in 1998, the group purchased the Houston Street portfolio. It later partnered with the city of San Antonio to create the Houston Street Tax Increment Reinvestment Zone (TIRZ), which funded $14.4 million in improvements, including the overhaul of the Presa Street Bridge near College Street and the courtyard between the Frost Bros. and Bennett buildings across from the Majestic Theatre.

In 2001, the San Antonio Express-News reported that Federal Realty's investment was $100 million. Sweetnam said Thursday that Federal Realty made a return on its investment, but declined to give a specific figure.

However, given the near-empty Kress and the lot next door, there is room for improvement, Sweetnam said.

“All the other buildings are fully or substantially leased,” Sweetnam said. “We have Texas de Brazil in the (Kress) property, and they are doing well. The upper floors (of the Kress), they're a challenge — and hopefully, the deft hands of a local group can make it happen.”

In all, there are seven properties and a parking lot at Jefferson and Houston streets totaling 400,000 square feet of space spread across 2.7 acres of land. Federal Realty is looking to sell the properties as a single portfolio.

The properties also include the Walgreens building, which also houses Nix hospital offices, and the Frost Bros. building. Also in the package: the Bennett building, known for many years as the home of the Joseph's department store, and which now houses Bohanan's Prime Steaks & Seafood. The businesses in those sites are not part of the package.

Sweetnam declined to disclose the asking price.

“Several dozen” parties have shown interest in buying the portfolio, he said. He didn't divulge their identities, but said the potential buyers were local, statewide and national.

“We're still probably several weeks away from understanding who the true players are,” he added.

Mayor Ivy Taylor said she'd like to see a San Antonio buyer.

“It would be great if the buyer could be local because that might provide them more insight — and possibly a stronger commitment — to the area,” Taylor said. “Since it's such a key corridor, I think it could be helpful if it's a local investor with a strong commitment to finishing the work there.”

Centro San Antonio CEO Pat DiGiovanni sees Federal Realty's time in San Antonio as a success.

“A number of properties were either rehabilitated or developed. Houston (Street) may have looked a lot different without their investment,” DiGiovanni wrote in an email. “We need to work with the new buyer of those buildings. A great opportunity exists to create housing and new jobs in downtown. Centro will be there to assist.”

A lot of property on Houston Street will potentially change hands in the near future.

Jose Gonzalez, owner of the Maverick apartment building at 400 E. Houston, is in the middle of a legal tug-of-war with his lender, S.A.-based Kopplow-McManus Properties Inc.

The San Antonio Children's Museum at 305 E. Houston stands between the Vogue and Kress buildings. It's for sale as the museum prepares to move into its new home on Broadway north of downtown. As a result, the entire north side of the 300 block of East Houston Street is on the market.

“It's encouraging for us as it means the whole side of the block is in play,” said Paul Chapman, the museum's vice president of marketing and strategy.

Greenbelt, Maryland-based Baywood Hotels is another major player on Houston Street. It owns the Home2 Suites by Hilton (formerly the South Texas Building) and TownePlace Suites by Marriott (formerly the Neisner building), and is constructing a new multi-story hotel next to the Maverick building.

This report has been updated to clarify that Hotel Valencia on Houston Street was for sale. The building is for sale, not the business.

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bolivo@express-news.net