OAKLAND, CA—Timing is everything, which is the case with the LEED Platinum office tower located at 1221 City Center in the heart of Oakland's CBD. The 24-story tower recently sold to an undisclosed buyer, and the timing of the disposition was specifically choreographed to play on the strength of the Bay Area office market, says American Realty Advisors and its partner, Westcore Properties.
Kirk Helgeson, American's chief investment officer, tells Globest.com: "The Bay Area market has been performing tremendously well and is continuing to drive demand to its surrounding submarkets, including Oakland. As office rents continue to increase throughout the San Francisco CBD, investor interest in Oakland continues to grow. This continued growth throughout the area, coupled with the strong demand for high-quality office product made this the perfect time to sell this asset."
The property encompasses 521,177 square feet and is located within Oakland's thriving City Center mixed-use development at the intersection of 12th Street and Broadway. 1221 City Center features immediate access to BART, views, a newly renovated lobby and common areas.
"Our strategy at acquisition was to renovate the property, lease up the remaining vacancy, and ultimately create an asset that was attractive to a wide range of core buyers," says Helgeson. "1221 City Center is a strong asset for a long-term holder, and we believed that it was time to realize the value that we have created for our investors after successfully executing the business plan."
Westcore Properties' Don Ankeny indicated that the "extensive recent capital enhancements, the strong tenancy, which features 98% occupancy with an investment grade credit-anchored rent roll, and the asset's direct access to market-leading amenities," were reasons for the significant buyer interest. He added that the nearly $21.5 million in capital improvements from the American and Westcore partnership have transformed 1221 City Center into one of Oakland's more noteworthy office properties.
"Significant amounts of adaptive reuse development, substantial institutional investment in the office and multifamily sectors, and the rent discount from San Francisco's CBD has continued to attract high-quality office tenants to the area," noted Ankeny.
American and Westcore were represented in the transaction by Eastdil Secured.
As previously reported, numerous tenants are moving into Oakland.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
