Lender Grabs Oakland Tower Valued at 70% Discount

A lender has taken over a downtown Oakland office building after the 10-story tower failed to attract any bidders at a foreclosure auction, setting another benchmark for plunging valuations of office properties in beleaguered Bay Area markets.

The office tower, located at 1700 Broadway in the Oakland district known as Uptown, was acquired by Bank of the Sierra in a proceeding that place a $4M value on the property, according to a report in SiliconValley.com.

An affiliate controlled by HP Investors, a real estate firm based in Solana Beach in San Diego county, paid $13.3M to buy 1700 Broadway in 2017, which means the property has lost nearly 70% of its value.

In 2020, HP secured a $9M loan on 1700 Broadway, which is on the corner of 17th Street and Broadway. The loan went delinquent in February.

At the end of Q1 2024, downtown Oakland’s vacancy rate hit 19.7%, a tick up from the 19.6% vacancy level at the end of 2023, according to a market report from Colliers.

In a much more positive development a few miles to the southeast in the East Bay, the city planning commission in Dublin voted unanimously this week to rezone and establish development criteria for a 192-acre plot of vacant land east of Fallon Road and north of I-580.

According to a report in the San Francisco Business Times, the city is hoping to facilitate a redevelopment project that potentially could bring hundreds of new homes and more than 3M SF of commercial office space.

GH PacVest, a subsidiary of China-based Guanghui Industry Investment Co., acquired the property in 2017 for about $130M. GH PacVest has yet to file an application to build on the site, but the planning commission’s vote constitutes an agreement not to change the zoning on the site.

The planning commission voted to split the four-parcel property into 11 parcels and convert 42.6 acres of public or semipublic land into parks and public recreation space.

Five of the parcels have been zoned, encompassing 126 acres, fall within the Fallon East Economic Development Zone, an area that offers incentives to developers for making investments in medtech, biotech and other startups.

Nearly 14 acres on the property are zoned for medium- to high-density residential development.