TMG Partners and KKR have teamed up in major Bay Area office acquisition. The venture has purchased 1221 City Center, a 24-story, 522k sf tower in Downtown Oakland. The Class A tower is located at 1221 Broadway, at the intersection with 12th St in the heart of the city’s downtown area.
The high-rise was sold by Swiss-based UBS AG. Although a price was not given out by the parties involved, industry sources report a deal value of around $255 mil, or $488/sf.
1221 City Center is 99% leased. Existing tenants include Clorox, Union Bank, Stanford Health Care, Wells Fargo Bank and Parsons Brinkerhoff. The building features panoramic Oakland skyline and Bay views, onsite retail amenities and ample parking, as well as bike lockers and showers. It is one of three buildings in the Bay Area that enjoy access to BART, via a direct entrance to the 12th Street Station through the building lobby.
The property has undergone more than $24 mil of capital improvements over the past five years including a significant lobby renovation featuring modern marble and wood paneling. It features 360-degree views that span from the Bay Bridge and the San Francisco skyline to the Oakland Hills, LEED Platinum rating, extensive glass window lines, large floorplates and extensive on-site amenities that include an expansive outdoor plaza featuring a variety of shops, eateries, and lifestyle amenities.
The purchase is the second transaction by TMG and KKR in Oakland this year, following the purchase of 1330 Broadway in Oakland in July. KKR is making the investment through its Real Estate Partners Americas II Fund.
Newmark Knight Frank (NKF) Vice Chairman Steven Golubchik, Senior Managing Director Tyler Meyerdirk and David Hosler represented the seller. The buyer, KKR and TMG Partners, worked with NKF Vice Chairman Ramsey Daya, Senior Managing Director Chris Moritz, and Director Travis Bailey to raise debt for the acquisition.
Oakland’s central business district has the lowest office vacancy rate in the country at approximately 4.9%. This is largely driven by a demand for large blocks of office downtown space and lack of supply. More than 120 tenants leasing more than 2 msf of space have relocated to or expanded in Oakland from San Francisco since 2011.