By Jon Peterson
Menlo Park-based Lane Partners and Chicago-based Walton Street Capital have come together to put under contract the 228,033 square foot office building in Oakland located at 2150 Webster Street. The purchase price is just over $192 per square foot or $44 million, according to public records.[contextly_sidebar id=”XrLtAxl2jRab8hfD7zVxSBuM0WRHztOi”]Walton Street Capital did not respond to a phone call seeking comment for this story. The seller of the property was represented by the San Francisco and Oakland offices of CBRE. This included Russell Ingrum, vice chairman, and Sean Sullivan, executive vice president. Ingrum declined to comment when contacted for this story.
The property will represent a major value-add investment opportunity for the new owner. The property is now occupied by AT&T. This won’t be the case much longer since the tenant will be moving out of the entire building in September. This will allow the next ownership group to completely re-brand, renovate and reposition the asset for the future. The property was developed in 1975 and has a total of 10 floors.
This kind of asset and transaction fits in with how Walton Street operates. The real estate investment manager is known as an opportunistic player with real estate assets. The company has been doing transactions similar to these on a national stage for a long time. In many cases it invests capital with local operating partners to improve existing assets for its closed-ended commingled funds. It is presently out in the market raising capital for Walton Street Real Estate Fund VIII. One of the investors in the commingled fund with a $50 million commitment is the Maine Public Employees Retirement System.
The location of 2150 Webster has several strong attributes. One of these is that it’s located two and a half blocks from the 19th Street BART station. This will give employees of any new tenants in the property excellent access to public transportation. The office asset is also two blocks from Uber’s future home at Uptown Station.
The Oakland office market has very strong demographics. Since the beginning of 2014, over 960,000 square feet of positive net absorption has occurred in the CBD part of Oakland. This has led to decreasing the vacancy rate down to 4.1 percent, through the third quarter of last year. Asking rents for the Class A space have risen by 32 percent over the same time period.