Over 13% of Entire Oakland Office Inventory Now on the Market
For quite some time, the Oakland commercial real estate market had been playing catchup with the rest of the region. Yet, the length of the current cycle has made even some traditional skeptics into believers, and the city was suddenly dealing with little to no vacancy. Prices of properties jumped, and now some of those believers are looking to cash in their returns. Los Angeles-based CIM is the latest landlord looking to offload its properties in Oakland, setting a stage for a competitive market.
The sale was initially reported by a San Francisco Business Times report and subsequently confirmed by one source. The report lists five of the twelve properties CIM owns in Oakland, which total over 1.5 million square feet of office space, that are slated for sale. They are (descriptions included are from CIM’s web site):
1 Kaiser Plaza – This 28-story Class A office tower was built in 1970 as part of the Kaiser Industries corporate headquarters complex and was named after its first employee, A.B. Ordway. The 530,000 square foot property is located in the Lake Merritt district of downtown Oakland, a transformative area with many new retail, residential and cultural amenities under construction or recently completed. The property also offers exceptional views of Lake Merritt, the downtown skyline and the adjacent $191 million Cathedral of Christ the Light.
1333 Broadway – This Class A tower offers 238,000 square feet of commercial office space in the City Center district of downtown Oakland. This 10-story building is conveniently located directly above the 12th Street/Oakland City Center BART station.
1901 Harrison St. – This 272,000 square foot Class A office tower was built in 1985, and is located in the Lake Merritt district of downtown Oakland. Its exceptional location offers beautiful views of Snow Park and Lake Merritt. The property also encompasses 242 subterranean parking spaces for the use of building tenants.
2101 Webster – Built in 1984, 2101 Webster, also known as Center 21, is a 475,000 square foot Class A office tower located in the Lake Merritt district of downtown Oakland. In 2008, a 215,000 square foot addition, called 2100 Franklin, was built, and the two buildings are now collectively referred to as Center 21. 2100 Franklin is the first non-owner occupied LEED-Gold office tower in Oakland. Center 21 offers panoramic views of Lake Merritt and numerous developments currently underway in the area. Parking is provided by a 695-space garage located at 2353 Webster Street and by 56 subterranean parking spaces.
2353 Webster Street Garage – This is a 695-space structured parking garage located 2 blocks north of Center 21 (2101 Webster Street and 2100 Franklin Street).
The intended sale of these five properties follows an announcement by UBS to sell its property on 1221 Broadway, a building that is over 520,000 square feet, and TMG Partners’ announcement in April of 2018 to market its 316,000 square foot building on 1330 Broadway. A smaller property on 401 Grand Avenue, which measures 38,988 square feet, is also for sale by Oakland-based Murray Hill Properties. That brings the total property on the market for sale in Oakland to over 2.3 million square feet, which is over 13 percent of the entire 17.2 million square foot Class A and B office market of Oakland. According to a Q1 2018 Colliers International market report, downtown Oakland has 146 buildings measuring 15.6 million square feet, in addition to 44 buildings measuring 1.6 million square feet in the city’s Jack London Square submarket.
In December of 2017, CIM invested just over $180 million, or roughly $505 per square foot, to acquire Uber’s Uptown Station building, the 1929 era former department store, which is under construction to be redeveloped into a 356,000-square-foot, eight-story Class-A creative office building. Just two months before, in October of 2017, KBS Strategic Opportunity REIT II, purchased Oakland City Center, comprised of 505 14th Street and 1300 Clay Street, for $155 million, from Rubicon Point Partners. 505 14th Street sold for $72,688,000, and 1300 Clay Street sold for $82,312,500, according to public records. The combined per square foot sale for these two buildings came to approximately $420 per square foot.