Tidewater Capital buys 526K sf office in Oakland

Tidewater Capital has acquired a 526,000-square-foot office complex with a base of government tenants in Oakland.

The San Francisco-based developer and investor bought the office portion of the Eastmont Town Center at 7200 Bancroft Avenue in East Oakland, according to a deed filed with the Alameda County Clerk-Recorder’s Office on Monday. The seller was Vertical Ventures, a Walnut Creek-based real estate investment firm that purchased the property for $54.5 million in 2015 and invested $5 million into it over the next four years.

It’s unclear how much Tidewater paid to acquire the center’s offices from Vertical Ventures, since details of the deed on Alameda County’s website didn’t disclose a transfer tax. Neither firm responded to calls and emails seeking comment. The property’s total net taxable value is about $69.2 million, according to the county’s Assessor’s Office.

The complex is anchored by Alameda County, which occupied 41 percent, or about 213,000 square feet, of its space when it hit the market for sale in September 2019, news outlet The Registry said at the time. Other tenants include Oakland’s police department and public library, Alameda Health System and Quest Diagnostics. The site was 87 percent occupied when it hit the market, although it’s unclear what that number is today.

The deal is Tidewater’s latest investment in Oakland, where it now owns seven properties, four of which are in or near its downtown. In January, the firm filed plans with the city for almost 300 new apartments a block from the West Oakland BART Station, an area slated to become a transit-oriented, live-work hub.

It also has filed two project proposals for a downtown surface parking lot at 1431 Franklin Street for the city to choose between: A 36-story, almost 400-foot-tall tower with about 350 residences, and a 27-story, 425-foot-tall office high-rise with 420,000 square feet of Class A space. If the city ends up choosing the office option, it would be among Oakland’s tallest buildings if completed.

If Tidewater’s aim is to redevelop Eastmont’s offices into something denser, the site’s zoning guidelines allow for a 2.1 million-square-foot project up to five stories tall. However, those guidelines limit the firm’s ability to add new homes or attract commercial tenants besides office users, shops and restaurants to the property. Multifamily units are permitted only if they’re part of a project that’s mostly commercial space, while research and development, light manufacturing and warehousing uses are all prohibited there, according to the city’s zoning regulations.

The city isn’t aware of any potential plans for the property, said Angela Robinson Piñon, assistant director of Oakland’s planning and building department, in a Tuesday email. The department hasn’t received any requests for a pre-application meeting or any planning applications that correspond to its address, she said.

The site was once an enclosed mall anchored by department stores JCPenney and the now-defunct Mervyn’s before both exited it in the early 1990s, leading its occupancy rate to drop to 30 percent, the San Francisco Business Times reported in 2015. Former landlord Eastmont Properties decided to convert it to a government services center in 1997, and its occupancy rate got back to as high as 90 percent at one point, The Registry and the Business Times said.

The 116,000-square-foot retail center adjacent to the office complex wasn’t included in the sale and remains owned by Levy Affiliated, a Southern California-based real estate investment firm, according to title company records. Its anchor tenants include CVS, DD’s Discounts and Gazzali’s Supermarket, and more than 41,000 people live within a one-mile radius, according to a January 2020 online marketing brochure.

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