By Jon Peterson
Uber is planning to sell its 365,000 square foot office building in Oakland to Los Angeles-based CIM Group for approximately $180 million, according to multiple sources familiar with the transaction. The deal has not closed at this point, however, CIM has placed a major non-refundable deposit to acquire the property. This would bring the pricing of the property to nearly $505 per square foot.
Uber had hired the San Francisco office of Newmark Knight Frank to sell the property. Newmark declined to comment when contacted for this story. Part of the acquisition costs of the property covers the building itself, and there is also capital that will be used to complete the base building work on the structure.
The asset that Uber is selling is located at 1954 Telegraph Avenue. It was known in the past as the Sears Building. The seller had acquired the property in 2015 for $123.5 million, or roughly $347 per square foot, according to public documents. Just a year earlier, Menlo Park-based Lane Partners and their partner, Chicago-based Walton Street Capital purchased the building for $24.2 million, or just over $68 per square foot, before turning it around to Uber.
The ride-sharing company is planning to lease back a portion of the building, as stated by sources that are familiar with the sale process of the building.
The sale of the property will bring a very large block of new space to the Oakland market. Industry sources have indicated that the space for the Uber building should be ready for occupancy sometime over the next six to 9 months. This compares to the 320,000 square feet of space to be developed at 1100 Broadway in Oakland by San Francisco-based Ellis Partners, which will not be ready for occupancy until 2019.
There should be plenty of demand for large space users looking for a home in Oakland. Many of the large spaces in San Francisco have already been accounted for. This includes the 432,000 square foot lease that Facebook has signed for 181 Fremont and Amazon taking 180,000 square feet at 525 Market.