By Jon Peterson
Los Angeles-based CIM hopes it will have more success this time around in its sale of The Ordway Building in Oakland, which it is putting on the market again. The pricing guidance on the property this time around is $270 million, or just around $502 per square foot, according to sources familiar with the property.
The current owner had placed the office building on the market in March of 2020. It then chose to take it off the market due to the uncertainty of the impact COVID-19 may have on the commercial real estate pricing.
The listing agent on the sale of the property is the San Francisco office of JLL. Those working on the marketing of the asset include Rob Hielscher, David Dokko and Erik Hanson. JLL declined to comment for this story when contacted. The previous attempt at marketing the property put the guidance pricing at $257 million.
CIM has been the owner of the property since 2008. The real estate investment firm had acquired the building for $82.1 million at that time, according to public records.
The Ordway Building is 27-story 537,803 square foot building, according to sources that track the sale of office buildings in Oakland. The property is located at 1 Kaiser Plaza, which is within the Uptown sub-market of Oakland.
The office building has a current occupancy of 90 percent. The main tenant in the asset is Kaiser Permanente. It occupies 71 percent of the existing space in the property. It has two staggered leases that expire in 2025 and 2027. This tenant was also the original developer of the property when it was first constructed in 1970. The other significant tenant in the property is the State of California Public Utilities Commission, which takes up three percent of the property now.
The new owner of the property could add some value to the asset in the future. The current rents in the building are now approximately 30 percent below market rates. The average weighted lease term remaining is 3.2 years as of January 2022. Leases that take up roughly 13 percent of the space in the property will be expiring over the next three years.
Oakland has a very active leasing market. According to data supplied by JLL, there are currently 52 active office space requirements by tenants that total 708,000 square feet. Class A rents for office buildings in Oakland have nearly doubled in the last decade.
Oakland has also experienced a residential boom that could make the market attractive for employers looking to locate an office in proximity to housing. JLL stated in a flyer for The Ordway Building that there has been 5,096 new housing units delivered in Oakland over the past 24 months, 2,150 units are currently under construction, and over 16,000 units are either planned or in the proposal stage.