Rubicon Closes on Oakland Transaction for $115MM

CBRE, Prime logistics rents, Oakland, East Bay, Industrial & Logistics real estate, Seattle, New Jersey, commercial real estate services and investment firm

San Francisco, Rubicon Point Partners, OaklandX BART, Strada Investment Group, Angelo Gordon & Co., Allen Matkins, San Bruno, CalPERS

By Jon Peterson

San Francisco-based Rubicon Point Partners has closed on the acquisition of two office buildings in Oakland for $115 million, according to sources familiar with the transaction. The assets it bought were the 172,000 square foot 505 14th Street and the 195,000 square feet 1300 Clay Street.

[contextly_sidebar id=”y2DiWwHNkyUQny5m2zepkmanq3bkA2el”]“We are very excited to close on this transaction. We had first looked at the Oakland market around three years ago, and we feel good about where the market is going now. The location of the properties is very strong. They are two blocks from the Oakland BART station, which is something that is very important to us,” says Ani Vartanian, a managing partner with Rubicon Point Partners.

There will be a chance for Rubicon to add some value to these two properties. “I would say that that the leases in the properties now are 30 percent to 40 percent below market,” said Vartanian. There also is the fact that 505 14th Street is 92 percent leased and 1300 Clay is 85 percent leased. Some additional leasing at these properties could take place.

These assets are not brand new properties. 505 14th Street was constructed in 1985 and 1300 Clay was built in 1990.

The seller of the property was a joint venture between San Francisco-based Strada Investment Group and New York City-based Angelo Gordon & Co. The law firm of Allen Matkins provided legal counsel on the deal for Strada. “This deal is further evidence of the growth of the Oakland office market, as a bid deal where the seller received its anticipated economics,” said Crystal Lofing, a partner with Allen Matkins.

This deal is a much larger transaction that Rubicon has done in the past. An example of this would be that last December the company paid approximately $45 million to acquire The Lakes of Bayhill office building in San Bruno.

A factor in the larger deal size for Oakland is what happened earlier this year with Rubicon’s equity source for its deals, the California Public Employees Retirement System. The pension fund had stated in a board meeting in June that it wanted to increase its allocations in the future to its emerging managers, one of which is Rubicon. Los Angeles-based Canyon Partners Real Estate is the real estate manager that oversees the emerging manager program for CalPERS. The initial allocations to the emerging managers were in the range of $50 million to $100 million per manager. The plan for the future would be to allocate each of the emerging managers anywhere from $200 million to $500 million.