Private Trust Places Office in San Leandro up for Sale with $13MM Asking Price

San Leandro, Lee & Associates, Kaiser Permanente, Bay Area, East Bay, BART

By Jon Peterson

A private trust based in San Leandro has put up for sale the nearly 57,000-square-foot office building located at 777 Davis Street in San Leandro. The asking price is $13 million, or nearly $228 per square foot, according to the property’s offering document.

The current ownership has held title to the property since 2013, according to public records. The seller has selected the Oakland office of Lee & Associates to be the listing agent on the transaction. Among those working on the sale are Neil Cowperthwaite and Winston Street, both associates with the company. Lee & Associates did not respond to a phone call seeking comment for this story.

This property would likely attract capital sources that are looking to invest in value-add office assets across the Bay Area. The reason for this is that the building has a current occupancy of roughly 60 percent, according to the property’s offering document.

The office building has a total of 56,896 square feet, and it is three stories in height. The main tenant in the property is Kaiser Permanente, which has two leases in the property. One is for the entire second floor of around 18,270 square feet. In addition, it also has a lease of 11,190 square feet on the first floor. Both of these leases have an expiration date of the end of October 2027.

There are two other tenants on the first floor. One of them is the 1,000-square-foot lease to the Daniel Weltin Law Office, which has a month-to-month arrangement at the moment. The other tenant, which occupies the same amount of square footage, is LIT San Leandro. The entirety of the building’s third floor of approximately 17,824 square is vacant.

If the asking sales price is reached, the transaction would happen with a 5.77 percent cap rate. This return would be based on the property’s current net operating income of $750,000. The leases with Kaiser have three percent annual rent increases and two five-year extension options.

777 Davis Street was first constructed in 1989. The asset is considered to be a Class B property, as stated in its offering document. The property covers 2.42 acres of land, and 9t has a total of 212 parking spaces for its tenants. The office asset is considered to be part of the downtown area of San Leandro. A major amenity is that the building is located just a seven-minute walk to the San Leandro BART station

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