TMG Partners and KKR have acquired 1221 City Center in Downtown Oakland, Calif.
Financial details were not disclosed; however, the San Francisco Business Times reports the owner UBS AG sold the office tower for $255 million.
“We expect that the Oakland office market will continue its positive trajectory because of strong tenant demand and extremely limited supply,” said David Cropper, TMG’s director of development.
The project is a 24-story, 522,000-square-foot office building and is located at the intersection of Broadway and 12th Street. The building is one of three in the Bay Area that enjoys access to BART via a direct entrance to the 12th Street Station through the building lobby. 1221 City Center is 99 percent leased. Existing tenants include Clorox, Union Bank, Stanford Health Care, Wells Fargo Bank and Parsons Brinkerhoff.
The purchase is the second transaction by TMG and KKR in Oakland this year, following the purchase of 1330 Broadway in Oakland in July, selling for approximately $173 million.
“We are excited to partner with TMG for our second Oakland-based transaction this year, which will be KKR’s third investment in Oakland since 2017. We believe Oakland has attractive long-term secular growth trends driven by its accessibility to transit, a growing retail amenity base, and a meaningful amount of residential development,” said Justin Pattner, head of real estate equity in the Americas at KKR. “1221 City Center is an iconic property in the Oakland skyline, and we look forward to the next phase of its business plan.”
KKR is making the investment through its Real Estate Partners Americas II Fund, which held a $2 billion final close in January 2018.
