CBRE Investors Grabs 1.6M-SF Downtown Oakland CRE Portfolio for $356M

Shorenstein had acquired four of the buildings in a $120 million deal in late 1996, and brought in the Ohio pension fund as a 50/50 partner in 1998. In 1999, the joint venture exercised an option to purchase the parking facility from the City of Oakland.

July 2, 2010
By Barbra Murray, Contributing Editor

Los Angeles-based CB Richard Ellis Investors, acting on behalf of its CBRE Strategic Partners U.S. Value 5 Fund, has acquired a premier five-building portfolio of properties consisting of 1.6 million square feet of office and retail space and a parking facility at Oakland City Center in Oakland, Calif. CBRE Investors purchased the assets from San Francisco-based Shorenstein Properties L.L.C. and the State Teachers Retirement System of Ohio for approximately $356 million.

Shorenstein had acquired four of the buildings in a $120 million deal in late 1996, and brought in the Ohio pension fund as a 50/50 partner in 1998. In 1999, the joint venture exercised an option to purchase the parking facility from the City of Oakland.

Located in Oakland’s central business district, the group of assets includes the LEED Gold-certified office structures at 1111 Broadway and 555 12th Street. The buildings encompass over 1 million square feet of office space, ground-level retail space and underground parking accommodations. The office properties at 1300 Clay Street and 505 14th Street and the City Square building feature an aggregate 460,000 square feet of office space and 55,000 square feet of ground-level retail space. The portfolio is rounded out by the City Center Garage, which accommodates 1,150 vehicles.

“While the entire portfolio is high quality, 555 12th street and 1111 Broadway represent the best buildings in the East Bay,” Phil Hench, Senior Managing Director, CBRE Strategic Partners U.S., said in a prepared statement. “This diversified portfolio in the heart of Oakland’s CBD benefits from spectacular views, tremendous access to major transportation corridors and BART, and proximity to newly developed residential properties.”

The multi-structure complex is 91 percent leased, a respectable accomplishment considering the current condition of the Oakland office market. The total vacancy rate for all office types in the Oakland area is 15.1 percent, according to a first quarter report by real estate services firm Colliers International. The total vacancy rate for Class A assets in the Oakland area is 12.5 percent. However, the portfolio’s occupancy level is more in line with that of the CBD’s Class A market, where the total vacancy rate is a relatively low 9.5 percent.