In an interview with GlobeSt.com, Brandywine SVP and Northern California managing director Daniel Cushing says Brandywine will focus on maintaining its dominant position in Oakland and building on its relatively new presence in the I-680 corridor.
The tight situation in its Oakland portfolio--2101 Webster, 1901 Harrison, 1333 Broadway, One Kaiser Plaza--has Brandywine following through on a speculative project Prentiss broke ground for in late 2005. The 215,000-sf office building is rising at 2150 Franklin St., which is a piece of land that came with its acquisition of 2101 Webster.
"We did it for a handful of reasons, not the least of which is that we are struggling to meet the expansion needs of our existing tenants," says Cushing, who prior to Brandywine was in charge of Northern California for Prentiss. "With the dot-com boom Oakland experienced a run-up, but only at about 60% of what occurred in San Jose and San Francisco; the highs weren't as high and the lows weren't as low and, as a result, our recovery came first."
The building at 2150 Franklin will be complete in about 12 months. Steel starts going up at the end of the month. "We've got good activity; there's not a ton of big user blocks available, especially in the East Bay," Cushing says.
Over Labor Day weekend, Brandywine relocated and expanded its local office to 9,000 sf at 2101 Webster. The move filled up some vacant space there while freeing up ground-level space at 1901 Harrison that will be repositioned as retail space, Cushing says.
Looking further out, Brandywine has two other development sites in Oakland that are capable of supporting a combined 900,000 sf of built space. Both are near existing Brandywine properties. One of the sites is near its 1901 Harrison building and the other is near One Kaiser Plaza, also known as the Ordway.
"They are not quite entitled or planned," Cushing says. "They are maybe mixed-use opportunities."
As part of its acquisition of Prentiss, Brandywine sold to Prudential Real Estate Investors a $753-million portfolio of Prentiss assets. In Northern California, that included one of Prentiss' Oakland buildings (155 Grand) and its only Silicon Valley asset, 5500 Great American Parkway, which is better known as 3Com's old campus. As part of the deal, Prentiss retains the management assignment for the properties.
From an ownership perspective, Brandywine's only non-Oakland assets in Northern California now are a pair of buildings in Concord, CA, known as Concord Airport Plaza A and B. After some recent expansions there, Wells Fargo now occupies the majority of the space. "Right now it's a very stable asset; there's not much value to be added," he says. "But it gives us a little bit of a foothold in that market."
Overall, Brandywine's situation is pretty stable in Northern California at the moment. "We've got a solid base with good occupancy and not a lot of distractions," he says. "There are no huge tenant rollovers on the horizon and no credit problems."
Looking ahead, Cushing says that along with entitling its other Oakland development sites he will continue to seek out value-add opportunities elsewhere in the Bay Area. "None of the markets are off limits," he says.
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