UCSF Benioff Children’s Hospital is entering into the final stages of its search for office space in Oakland, with one source telling TRD that two office buildings in the city’s center are in the running despite recent speculation that new construction would be preferred.
The university is six weeks from deciding where in the city it will lease between 150,000 and 175,000 square feet.
UCSF is “evaluating existing buildings as well as not-yet-built locations,” according to Bruce Lanyon, assistant vice chancellor of real estate at UCSF. The university is looking for a building that offers contiguous space in an area located near public transit options.
According to a person with knowledge of the search, UCSF has strict seismic requirements which will limit the number of existing buildings available to it. Two existing options that are still in the mix are 601 City Center and 555 City Center, both on 12th Street. The building at 601 Center would “seem to stand out” because it was built in 2019, according to the source.
Both buildings were developed by Shorenstein Properties. 601 City Center has 300,000 square feet of available space; 555 City Center was built in 2002 and has 207,000 square feet of available space.
With the strict earthquake requirements UCSF has to navigate, it may choose a project that has yet to break ground. Some candidates could include TMG’s Telegraph Tower at 2201 Valley Street, Hines’ Oakland Tower at 415 Thomas L. Berkley Way and Lane Partners’ and SUDA’s Eastline at 2100 Telegraph Avenue.
Either way, the lease will likely be a welcome addition but not make much of a dent in Downtown Oakland, where the vacancy rate climbed to 32 percent–about 2 million square feet––in the second quarter, according to a report by Cushman & Wakefield. That was up from 28 percent the same time last year. Class A office buildings had an even higher vacancy rate at 37 percent.
In any case, the UCSF at the minimum of 150,000 square feet would be the second-largest deal in Oakland since the pandemic. It would only trail a lease last year by PG&E for 600,000 square feet at the Kaiser Center near Lake Merritt.
The university is looking for a 15- to 20-year lease, and has had considerable interest from potential landlords since putting out a formal request at the beginning of the year. The space will accommodate staff from both its San Francisco and Oakland hospitals, consolidating existing offices around the East Bay into what UCSF calls its “Oakland hub.?
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