Behring Buys Oakland Office Tower, Plans Mixed-Use Campus

Kaiser Permanente has sold a 21-story office tower and an adjoining five-story parking garage in downtown Oakland for a bargain basement price to San Ramon-based Behring Companies.

The aging 446,000-square-foot tower at 1950 Franklin St. traded for $14.35 million, which translates into about $32 per square foot. The building, which Kaiser had owned since 2002, has been mostly vacant since the beginning of the pandemic. Kaiser, which last month finalized the sale of its office property at 2000 Broadway in Oakland to BART for $26.5 million, said in a statement that the offloading of the Franklin Street properties does not mean that the healthcare giant is abandoning the city, the San Francisco Business Times reported.

“Oakland has always been an integral part of Kaiser Permanente’s identity and history—and it remains an important part of our future,” the company said. “Our national headquarters will remain in Oakland’s Ordway building at 1 Kaiser Plaza, its home for more than 50 years. The move does not affect our Oakland Medical Center or any care delivery.”

In 2023, Kaiser said it would be moving 10% of its Oakland workforce, about 1,200 employees, to its Pleasanton campus as it explored options for its offices at 1950 Franklin and 1800 Harrison. The company still owns 1800 Harrison St.

The 635-space parking garage at 1901 Franklin, which stands across the street from 1950 Franklin with the two buildings connected by a pedestrian bridge, also abuts Behring’s newly delivered 39-story luxury apartment tower at 1900 Broadway.

Colin Behring, CEO of Behring, told the San Francisco Chronicle that the acquisition of the two Franklin buildings, combined with the new multifamily tower, will enable the company to create a live, work, play urban campus in downtown Oakland.

“The acquisition of 1950 and 1901 Franklin allows us to assemble a dynamic urban campus capable of reshaping downtown Oakland,” he the newspaper. “This is the perfect opportunity to expand our vision for the fully integrated Stak Site, where people can live, work and play in one cohesive environment.”

Behring said a majority of the space in the parking garage will undergo redevelopment and integration into the company’s full-stack real estate ecosystem at 1900 Broadway, which combines tech-enhanced apartments, office and coworking spaces, and amenities including a fitness center and a Stak GO Tesla fleet available to tenants.

Behring said the tower at 1950 Franklin would undergo a “strategic expansion to meet the growing demand for affordable, turn-key space in downtown Oakland,” adding that plans for the building include “additional space and new offerings at a variety of price points,” the Chronicle reported.

The price for 1950 Franklin is a benchmark in a market with high vacancy and plunging office valuations. In June 1700 Broadway, a 10-story office building that had been returned to its lender, sold for $2.75M or about $87 per SF. The last time 1700 Broadway traded, in 2017, the property fetched $13.3M, or $422 per SF.