The reorganizing Kaiser Aluminum Corp. said on Friday it closed on the sale of its ownership in the property (including the entitlements) to Summit Commercial for $65.5 million as part of federal bankruptcy proceedings. Today (Monday, March 17), Summit said it paid another $34.5 million to buy out the other investors.
Summit President Jack Mahoney tells GlobeSt.com the previous ownership was a very complex tax structure deal that his company disassembled. "There was a complicated ground lease, master lease and sublease that we bought the pieces of to gain full control," he says. Specifically, Mahoney says Summit paid Kaiser $65.5 million in cash for its part, paid a company called Newkirk-Kalan LP $28 million in cash, and then paid off a $6-million loan that Newkirk-Kalan had on the property.
Kaiser Center is located at 300 Lakeside Dr. in Oakland. It consists of the primary 28-story office tower, a 1,500 space multilevel garage with rooftop garden and 130,000 sf of retail. It is currently 85% leased to corporate and government tenants such as the University of California Regents, California Bank & Trust, IBM and Bank of America.
Opened in 1960, it was the centerpiece of Henry J. Kaiser's original master plan for six million square feet of mixed-use development at the Lake Merritt location. Summit President Jack Mahoney calls the building a "masterpiece for its time" and says his company will restore the complex to regain its prominence among the premier buildings in the Bay Area.
"Particular attention will be paid to the ground floor, infusing it with natural light and restoring the open and airy space," says Mahoney. "Further, we will be developing a long-term plan that will include some reconfiguration of the retail component and analysis of the possibilities for new development."
Summit Commercial Properties has engaged Cushman & Wakefield to handle all property management and Cushman & Wakefield brokers Samuel Swan, Charles Allen and Ryan Hattersley to manage the leasing program for Kaiser Center. Warren Collins of MCC Realty represented Kaiser Aluminum in the transaction.
Summit Commercial is a Highridge Partners company that develops office and industrial buildings in selected supply constrained suburban markets in California. Other Summit properties in Northern California include Dublin Corporate Center in the East Bay, Pacific Plaza on the San Francisco peninsula, Solano Business Park in the Napa/Solano market, and Southport Business Park in Sacramento. Summit also owns two office buildings in the Los Angeles and three in Arizona and is developing a 670-acre business park in West Sacramento called Southport.
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