By Jon Peterson
San Francisco-based Bentall Kennedy has paid $47 million to acquire the 116,056 square foot office building known as the Latham Square Building in Oakland, according to sources aware of the transaction. The asset was bought on an all-cash basis.
The sellers of the property were San Francisco-based Ridge Capital Investors and Greenwich, Conn.-based Contrarian Capital Management. Ridge did not respond to phone calls seeking comment for this story, and Contrarian Capital declined to comment when contacted for this story.
The listing agent on the sale was the San Francisco office of CBRE led by Russell Ingrum, vice chairman of institutional properties capital markets.
“The unique U-shaped floorplates at Latham Square capture the views and bring in the natural air and light though the operable windows. The retail areas on the ground floor will be activated to complement the recent $9.5 million renovation of the public space at Telegraph Avenue and Broadway adjacent to the building,” said Matt Henning, of Bentall Kennedy in a prepared statement.
The sales price of $404 per square foot represents how much of a price point difference there is of Oakland versus San Francisco. The average sales price of office buildings in San Francisco is now at around $750 per square foot, according to sources that track the sale of office assets in San Francisco.
Bentall Kennedy has bought the property on behalf of one of its clients. The Latham Square Building is a historic building that is now 85 percent leased with strong leasing activity on the remaining space. Two of the tenants in the building are Omicia and Fluid. The property is considered to be a Class A asset.
Ridge Capital and Contrarian Capital have owned the asset since 2014 when they paid $12 million for the property in an auction. 40,000 square feet, primarily on the lower floors of the 14-story building, have already been repositioned to creative space demanding some of the highest creative office rents in Oakland. The plan is to complete the building repositioning within a few years.
Latham Square is located at 1611 Telegraph Avenue in Oakland. This puts it in the Uptown sub-market. New development is not happening in the sub-market as the level of rents does not warrant the cost of new construction at this time.
Oakland is one of the tightest office markets in the Bay Area with a 4 percent vacancy. According to a local leasing firm, over 1.8 million square feet of tenants have relocated to the East Bay since 2010. The majority have come from San Francisco and have located in Oakland.
Images courtesy of lathamsquarebuilding.com