Frontline Realty Capital has bought an historic, 10-story office building in Downtown Oakland for $5.5 million — $38 million less than it traded for in 2018.
An affiliate of the San Francisco-based investor bought the century-old, 91,000-square-foot Realty Syndicate Building at 1440 Broadway, the San Jose Mercury News reported. The seller was an affiliate of BrightSpire Capital, a real estate investment trust based in New York.
The deal works out to $60 per square foot. That represents an 86% decline in value since its previous sale.
BrightSpire, a lender, seized the building in July 2023 through a deed-in-lieu of foreclosure from San Francisco-based Tidewater Capital, which walked away from $25.5 million in debt slated to mature in late 2026.
Tidewater and Paris-based AXA bought the city’s “original highrise” in 2018 for $43.5 million, or $478 per square foot, according to the San Francisco Business Times.
BrightSpire listed the building in August for an undisclosed price. As of June 30, it was 44 percent leased.
Frontline Realty Capital is thrilled with its bargain basement investment, its first in Oakland.
“1440 Broadway represents the type of building I want to acquire more of –- well-located assets with significant potential to create value through thoughtful repositioning and patience,” Robb Mann, founder of Frontline, told the Mercury News.
A fund managed by Archway Capital provided the Frontline Realty affiliate with a $3 million loan at the time of the purchase, county documents show.
Ground-floor tenants in the historic tower include Oaklandish, a high-profile apparel store; Edible Happy Pizzeria; and Gus’s World Famous Fried Chicken.
The brick-and-stone landmark, built in 1903, was designed by William Woollett and Franklin Oliver. The restored building has Carrera marble interiors, high ceilings, large windows that open and historic light fixtures and oak finishes, according to Orton Development.
The Realty Syndicate Building served as the headquarters for The Realty Syndicate, led by industrial tycoon Francis Marion “Borax” Smith, who made his fortune by employing 20-mule teams to haul borax from mines in Death Valley and Nevada.
Smith and his partner, Frank Havens, developed the historic Claremont Hotel, Hotel Oakland and local neighborhoods, and were behind the Key System railway. Realty Syndicate fizzled after the 1929 stock market crash; the railway’s last train crossed the bay in 1958.
Frontline Realty Capital, founded in 2016, invests in industrial, retail and office properties in the Bay Area, Inland Empire and select western markets, according to its website.
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