When San Francisco developer Peter Sullivan Associates purchased Old Oakland, a collection of 10 buildings across two city blocks that resembled a city from years past, in 2001 for $20 million, he had rescued an embattled location that for years had been mired in law suits and a foreclosure. Sullivan had purchased the property just before the September 11 attacks in New York had rocked the country to the core. His intention was to hold it for the long haul. Long enough at least until the market in in the East Bay city recovered enough to make the sale attractive.
Today, 11West Partners, as reported by the San Francisco Business Times, announced that it had purchased the complex from Peter Sullivan for $45.5 million, or roughly $222 per square foot, effectively more than doubling the investment made 14 years earlier, but in reality achieving a CAGR of just over 6 percent, without taking into account the return Sullivan earned on the rent.
The old-world charm had its appeal for Sullivan, who said at the time of the purchase that the location had remained him of Jackson Square in San Francisco. Since the purchase, the buildings have been updated to feature 24-hour security and gone through earthquake retrofits. CBRE was brought in to manage the property and Colliers International served as the leasing agent.
Amenities for tenants included a free conference room, fitness membership and lighted tree-lined streets surrounding the property. But the charm was amplified with ground floor retailers that helped activate the buildings and help them retain their charm in a city that so often is synonymous with crime. Restaurants and bars in the complex include The Trappist, Starbucks, Miel and Pacific Coast Brewing Company.
There are five suites available for lease, ranging from 305 square feet to 13, 081 square feet, totaling roughly 24,000 square feet, making the complex roughly 12 percent vacant.
Perhaps the biggest asset for the complex it its uniqueness, which is in short supply not only in Oakland, but across the region, as well. In a recent, second quarter Oakland Metro Area office report by Marcus & Millichap, the firm proclaimed that “yield-seeking investors [are] bidding up recovering Oakland assets.” Vacancy in Oakland has dipped to 10.2 percent in the first quarter, as businesses filled up mostly existing space in class B and C properties, states the report. Prices have increased an average of 11.4 percent over the last year, with class B and C properties trading around $160 per square foot, while class A assets sold over $250 per square foot, according to Marcus & Millichap.