By Jon Peterson
New York City-based Blackstone has made the decision to walk away from its planned $405 million acquisition of the Uptown Station office project in Oakland. As a result, the global investor will have to forgo the $20 million non-refundable deposit it made on the acquisition earlier this year, according to multiple sources that are aware of the situation.
Blackstone declined to comment when contacted for this story. According to industry sources, however, the company’s decision to not move forward with the sale was due to general volatility in the real estate and lending markets.
The real estate investment firm had placed the purchase of the property under contract in late February, as previously reported by The Registry. The deal at that time was for pricing that reached approximately $405 million, or around $1,020 per square foot, as stated by sources that were tracking the sale of the property.
The current owner of the 396,808 square foot property is Los Angeles-based CIM Group, which acquired the in-development property in December of 2017 for $180 million. CIM had been working with Newmark Knight Frank’s capital markets team in its San Francisco office as the listing agent on this latest sale. Among those involved working on the transaction are Vice Chairman Steven Golubchik, Senior Managing Director Tyler Meyerdirk and Associate Director Darren Hollak. Newmark did not respond to an email when contacted for this sale.
CIM had put Uptown Station for sale in the fourth quarter of 2019. At that time, the office building was 94 percent leased. The seven stories of creative office space were taken up by Square Inc. for the next 12 years. The Gensler-designed asset also has one level of ground-floor retail space. Some of the tenants in this part of the property are Shake Shack, Slice House gourmet pizza, Once Medical and Red Bay Coffee.
There have been three owners of the asset over the past five years. CIM has been the owner of Uptown Station since December of 2017. It had acquired the property for $180 million, or approximately $505 per square foot, according to public records and The Registry’s earlier reporting. The investment firm had bought the asset from Uber, which in 2015 was considering occupying the entire property. Uber had spent $123.5 million, or roughly $325 per square foot, in September of 2015 to buy the building from Menlo Park-based Lane Partners and their equity partner, Chicago-based Walton Street Capital. The two firms had purchased the building a year earlier for $24.2 million, or just over $63 per square foot, and invested another $40 million into the project.