By Meghan Hall
For years, investors passed over Oakland with the belief that the submarket—despite its proximity to San Francisco—was not strong enough to allow for new development or the production of strong returns. Now, companies are snapping up space across the city as its commercial real estate renaissance hits new heights. In a transaction that closed at the beginning of December that highlights increasing investor interest, Libitzky Property Companies (LPC) purchased eight parcels along a main commercial corridor in northwest Oakland for $41 million.
The transaction was first reported by The Mercury News.
The parcels included not just residences but Dreyer’s Grand Ice Cream Parlour, which closed in July after more than 20 years in business, as well as the Nestle Dreyer’s Cronk Center, Crossroads Trading and Katrina Rozelle Pastries. The Nestle assets are not far from the company’s corporate office in Oakland, also located on College Ave.
College Avenue itself is a vibrant commercial corridor which crosses the Grove Freeway and connects the Rockridge and Fairview Park neighborhoods. A mix of restaurants such as Cactus Taqueria, AQ6 and Khana Peena line the street, as well as a Safeway-anchored shopping center, Namaste Yoga and Wellness and Pegasus Books.
Based in Emeryville, Calif., LPC owns seven other properties in Oakland and Emeryville, including the Oakland Industrial Center and the Powell Street building. Founded in 1978, the firm specializes in the acquisition and operation of large industrial and office projects. According to its website, LPC currently has more than 30 projects and 6 million square feet of real estate in seven different states and is seeking assets and value-add opportunities in both core and secondary markets.
What LPC plans to do with its recently acquired Oakland assets is yet unclear. However, the firm has a history of acquiring assets, procuring entitlements and then selling the properties to developers. In 2015, LPC sold the 226,000 square foot Hunt-Wesson Business Park, located in Hayward, Calif., fully entitled with 157 residential units to Tri Pointe Homes. In March of 2016, LPC sold Cannery Park I in San Jose to Hanover Company. LPC had received entitlements to convert the 372,000 square foot industrial facility into a 403-unit residential development.
While downtown Oakland has mostly captured investor interest, the region’s commercial real estate boom is starting to extend outside of the city’s downtown core. Bridge Development recently purchased a 24-acre site from General Electric for $37.845 million at the beginning of December after receiving the entitlements necessary to develop 540,000 square feet of commercial space on the site. In November, CenterPoint purchased a 130,500 square foot industrial building along San Leandro Street $25 million from the Pinto Family Trust. In September, the 550,000 square foot Eastmont Town Center, owned by Vertical Ventures, hit the market.