Divco Bought Lake Merritt For...
DivcoWest just closed on Lake Merritt Plaza, and while the price tag was nothing like 2006, the prized Oakland office site commanded a strong figure. (Like the San Antonio Spurs, it may not be what it used to be, but you can never count it out.)
Sources tell us Lake Merritt Plaza traded for around $265/SF. The 80%-occupied site includes 1999 Harrison, a 27-story, 490k SF building erected in 1985, and 1956 Webster, a four-story, 45k SF building from 1955 and renovated in 2001. Beacon Capital bought the site for a whopping $347/SF in 2006, but that comp isn't a good one; sources remind us that year was an anomaly that hurt a lot of people. ('06 was a crazy year for all of us, Chamillionaire had a No.1 hit, things were weird.)
It's better to compare the $265/SF trade to last fall's sale of a nearby Class-A tower: Oakland City Center's 555 12th (above), which sold for a bit more per SF due to in-place rents. However, most people prefer the lake to City Center. Another East Bay source calls Lake Merritt Plaza the nicest office site in Oakland. DivcoWest plans to upgrade the lobby and common area space. JLL took the property out last year, and Eastdil brokered the deal.