Lender Takes Oakland’s Edgewater Park Plaza

The hits keep coming for Oakland’s battered commercial real estate market.

Edgewater Park Plaza, a 206,000-square-foot office complex near the airport, was seized by its lender through foreclosure after its owner defaulted on the property’s debt in January, Mercury News reported. East West Bank, acting through an affiliate, took control of the property at 7700 Edgewater Drive on Monday, according to Alameda County records cited by Mercury News.

The foreclosure valued the 10.6-acre office campus at just $8.7 million, representing a 75.6 percent markdown from the $35.7 million that a former HP Investors affiliate paid for the property in 2022. The unpaid debt tied to the complex totaled $21.4 million at the time of the foreclosure.

The wipeout underscores how quickly office values in Oakland and across the Bay Area have cratered as higher interest rates, weak leasing demand and remote work continue to change market dynamics. At the time of the previous purchase in 2022, office investors were betting on a post-Covid rebound. Instead, Oakland has become one of the Bay Area’s hardest-hit office markets as vacancies mount and tenant demand languishes.

Edgewater Park Plaza is hardly the first office property in Oakland to be seized by lenders this year. Last month, Kennedy Wilson took the keys for 601 12th Street from a Shorenstein Properties affiliate. And in January, Deutsche Bank AG seized three office towers at 2101 Webster Street, 1901 Harrison Street and 2100 Franklin Street from Starwood Capital through a deed-in-lieu of foreclosure. Other office properties could soon meet the same fate, with a historic building at 464 19th Street flopping into default earlier this month and Highbridge Equity Partners adding to their list of Oakland defaults with 1540–1544 Broadway in February.

— Chris Malone Méndez