KKR to pay $255m for Oakland office

KKR & Co. has entered a contract to buy the 521,100-square-foot 1221 Broadway office building in Oakland, Calif., for $255.34 million, according to San Francisco Business Journal.

The seller is UBS AG.

Rebounding from occupancy losses in second quarter 2018, in third quarter 2018, Oakland posted 453,395 square feet of positive net absorption, according to CBRE’s Oakland Office third quarter report 2018. The market-wide vacancy rate decreased 40 basis points quarter-over-quarter from 7.1 percent to 6.7 percent, while availability saw a modest 10 bps increase. CBRE expects these spaces will quickly lease as interest from out-of-market tenants has been gaining momentum.

Over the past nine years, tenant interest has seen a dramatic increase from 43 perspective tenants in September 2009 to 79 in September 2018. Increased tenant interest has placed pressure on both the Downtown area and secondary submarkets as asking rates reach news highs and quality space is quickly leased. Strong tenant demand, prospective growth, and a highly educated labor force continue to make Oakland an attractive option for many office tenants.