CIM Group is in contracts to buy Uber Technology’s Oakland building at 1954 Telegraph Ave. The sales price has been reported to between $175 million and $220 million.
CIM Group plans to invest another $50M to complete the renovation.
Uber purchased the old Sears building in downtown Oakland in 2015 for $123.5 million. It was to be Uber’s headquarters; however, the ride-sharing company did not move in. Uber announced plans to sell its Oakland asset in August as part of its efforts in downsizing to keep its employees in one location in San Francisco.
“As we look to strengthen our financial position so we can better serve riders and drivers for the long term, we’re exploring several options for Uptown Station, including a sale,” Uber spokesperson MoMo Zhou said in a statement. “We remain committed to serving Oakland and our broader hometown Bay Area community.”
At the time, the company said it still planned to have a presence in Oakland, but only about 200 workers instead of the 2,000–3,000 initially promised.
The company’s CEO Travis Kalanick recently resigned amid allegations of a toxic workplace culture and sexual harassment. And it posted a $2.8 billion loss last year, according to The Wall Street Journal.
Investor interest in Oakland’s CBD is strong, fueled by the market’s low vacancy and value-add opportunities, according to JLL. Six major office buildings have traded hands this year, totaling $500 million in year-to-date sales volume. Notable trades during the third quarter included 505 14th St. and 1300 Clay St., which sold to KBS for $432 per square foot.
Oakland CBD vacancy will increase during the next 24 months with as much as 1.0 million square feet of new or redeveloped office space set to deliver, not all of which is pre-leased. New deliveries will alleviate supply pressures and could provide lower-cost options for a wide variety of tenants looking to backfill spaces. The new properties coming online, where landlords are targeting rental rates of $60 to $70 per square foot, will result in higher CBD asking rents.
