By Jon Peterson
The sale of the 49,390 square foot office/retail building located at 2120 University Avenue in Berkeley could be sold in the low $20 million range, according to sources familiar with the property.
The seller of the property is San Francisco-based Soma Capital Partners. It has hired the San Francisco office of JLL as the exclusive advisor on the sale. The people involved in the sale are Rob Hielscher, Michel Seifer, Erik Hanson, Daniel Renz, Cheri Pierce, Erik Doyle and Will Connors. JLL declined to comment when contacted for this story.
Soma Capital has owned the asset since February of 2014, when it paid $9.65 million for the property. The investment company had bought the property as a REO when it was a vacant building. The current ownership has put over $2.6 million in capital investment into the property, exclusive of any tenant improvement costs. The renovation included elevator, restroom, fire and life safety and HVAC upgrades, along with a full lobby remodel.
2120 University is now a 100 percent leased property. WeWork takes up 90 percent of the space in the property, with a lease for 42,156 square feet. The in-place rent is for $33.42 on a gross basis. The lease runs until the end of February 2035. WeWork received a $65 per square foot tenant improvement allowance, totaling more than $2.7 million for upgrading the office space interiors.
There are two other tenants in the property. One is Ippudo Ramen Kitchen, which occupies 3,167 square feet. The in-place rent is $45 on a triple-net basis with the lease expiring in the end of August 2026. The other tenant is Blue Bottle Coffee, which takes up 1,709 square feet in the building. This lease has in-place rent of $48 on a triple-net basis with an expiration date of November 2031.
2120 University has a strong transit-rich location. It stands just two blocks from the downtown Berkeley BART station. The property is also one block west from the entrance to the University of California Berkeley campus.
The asset is situated within the Oakland urban metro office market, which includes Berkeley, Emeryville and the Oakland central business district. This market has a total of 18.8 million square feet office space and a vacancy rate of 6.1 percent through the second quarter of this year. Another positive for this market is that through the first quarter of this year there was a 60 percent spread of rental rates for office space in this market compared to office rents in San Francisco, according to data supplied by JLL.