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KBS Capital Advisors Buys Downtown Oakland Office Towers

Office buildings at 505 14th St. and 1300 Clay St. in Oakland

KBS Capital Advisors has purchased two office towers in Oakland. Rubicon Point Partners and Canyon Partners Real Estate sold the towers at 505 14th St. and 1300 Clay St. for about $154M ($420/SF), according to the San Francisco Business Times. Rubicon Point Partners and Canyon Partners bought the properties for $115M in 2015.

The two Class-A buildings total 367K SF and are at Oakland’s City Center above the 12th Street BART station. The 12-story, 172K SF tower on 14th Street and the 195K SF 11-story tower on Clay Street are 92% occupied with about 40 tenants from legal, finance and government.

Newmark Knight Frank Vice Chairmen and Capital Markets co-heads Steven Golubchik and Grant Lammersen, Director Tim Walling and Capital Markets Analyst David Hosler represented the sellers.

Activity in Oakland’s office market has picked up in recent months. Since 2011, Oakland has benefited from 1.6M SF of inbound migration of businesses with a majority coming from San Francisco, according to Newmark Knight Frank. The average spread between San Francisco rents and Oakland central business district Class-A rents over the last 18 years has been approximately 20%. The current spread is more than 30%, which is fueling accelerating migration.

“Historically, Oakland has been a longtime benefactor of spillover from tenants priced out of San Francisco," Golubchik said. “Oakland has now stepped out of San Francisco’s shadow. The Class-A vacancy rate in Oakland CBD is less than 4%, the lowest CBD office vacancy in the U.S.”