By Jon Peterson
A very significant sale of an office building in Oakland has been placed under contract, according to three sources familiar with the sale. The asset is the 396,808 square-foot Uptown Station office building located at 1955 Broadway. The presumed buyer is the Singapore-based Mapletree Investments, which is looking to buy the recently reintroduced property for around $420 million. This transaction has not closed at this time, and the final price has not been confirmed.
The seller of the property is Los Angeles-based CIM Group. It had brought the property back on the market last month with an asking sale price in the same range: $420 million. The listing agent on the sale is the San Francisco office of Newmark, whose efforts were led by Steve Golubchik, Tyler Meyerdirk and Darren Hollak. Newmark did not respond to an email in time for this story.
Uptown Station is located in Oakland’s revived Uptown neighborhood. It was put up for sale last year, and New York-based Blackstone had put the property under contract in February of 2020. The planned transaction was for about $405 million or $1,020 per square foot, as stated by sources that track the sale of office buildings in the Oakland market.
A couple of months later, Blackstone chose to pull away from the acquisition of the property in the wake of uncertainty caused by the global pandemic, which was emerging and spreading quickly across the globe at that time. This led to the investor giving up a $20 million non-refundable deposit on the property. This represented one of the first times that Blackstone had done this in its investment history.
Should the transaction with Mapletree go through, the sale of the property would produce a cap rate of 5 percent, as stated by a source aware of the transaction. This return would be based on the property’s current net operating income.
The possible sales price on Uptown Station would create a record price on a per square foot basis for Oakland office assets. The new price would come in at approximately $1,058 per square foot. The current record was a purchase at $632 per square foot for 180 Grand, which was completed by AXA IM in July 2019, according to public records.
Uptown Station is the kind of office asset that many investors have been looking to acquire since the pandemic started. This would be a single-tenant office building that is leased to a strong credit occupier. Uptown Station has all of its office space leased to Square Inc. for the next 11 years. Many investors now prefer to deal with one tenant in their assets and not have to worry about filling any vacancies given the lack of office leasing demand there is in the marketplace currently.
Mapletree Investments has invested in the Northern California market previously and holds a number of properties across the region. Some of its properties are located in Redwood City, Livermore, Newark, Mountain View and West Sacramento.
There have been three owners of the asset over the past six 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.