Highbridge Equity’s Oakland Offices Fall Into Default

Highbridge Equity Partners has fallen into default on three Oakland office buildings.

An affiliate of the Oakland-based firm was served a notice of default for a loan tied to the Tribune Tower at 403 13th Street as well as 405 14th Street and 1500 Broadway, the San Francisco Business Times reported. It could signal that a foreclosure process might be imminent, though Highbridge could still pursue a refinancing deal or loan modification, or sell the properties outright to offload the loan.

Highbridge bought the three office properties between 2016 and 2019 for a total of $119.6 million, according to the Business Times. “Deadliest Catch” producer Thom Beers and music producer Dr. Luke are among the firm’s backers.

Rialto provided a $111 million loan in 2022 to refinance $91.1 million in existing debt and fund future renovations and improvements for the three properties. The following year, Highbridge hammered out a forbearance deal with Rialto Capital Management after falling more than 30 days delinquent on its loan. At the time, Highbridge founder told The Real Deal that the firm was no longer considered delinquent after that deal.

After that, Highbridge reportedly made several late payments and delinquencies, according to the Business Times. The loan transferred to special servicing from August to October of 2024. As of this July, the Rialto loan had an outstanding balance of $94.5 million.

The loan itself is still active, so its lender can still pursue foreclosure, refinancing or term modifications, per the Business Times.

Oakland’s office market has struggled to regain occupancy in the years after the pandemic. In the city’s central business district, vacancy sits at around 27 percent, while leasing activity dropped 30 percent last quarter, according to the Business Times. As of the end of last year, Highbridge’s Oakland office portfolio had a combined occupancy of 34 percent; that includes 60 percent occupancy at the Tribune Tower, 25 percent at 1500 Broadway and 16 percent at 405 15th Street.

The slump has led to the sale of several office properties at steep discounts, including 180 Grand Avenue, 1950 Franklin Street, 1700 Broadway and 1440 Broadway. It remains to be seen if Highbridge opts to go the route of the 1515 Webster Street building, which it sold last year for $22.5 million after buying it in 2019 for nearly $19.3 million. — Chris Malone Méndez