Creative Media Pays $292M for Four Oakland Properties

A Texas real estate investment trust has acquired four properties in Oakland from its parent firm, Los Angeles-based CIM Group, for $282 million.

Dallas-based Creative Media & Community Trust bought a majority share in three properties in Oakland’s Jack London Square and one in Downtown, the San Francisco Business Times reported.

The publicly traded CIM affiliate bought an 89.4 percent stake in three Jack London Square properties.

It bought Channel House, a 333-unit apartment building at 40 Harrison Street for $134.6 million. CIM bought the site in 2016 for $18.5 million.

It bought Site F3, a vacant 2.29-acre site at 55 Harrison Street approved for a 144-room hotel, for $250,000. CIM bought the site in 2017 for $1.5 million.

And it bought Site D, a 0.55-acre parking lot at 466 Water Street approved for a 136-unit apartment complex, for $2.5 million. CIM bought the property in 2016 for $6 million.

The trust, managed by CIM Group, also bought a 98.1 percent stake in 1150 Clay Street, a 288-unit apartment building in Downtown, for $145.5 million. CIM bought the site for $3.35 million.

As part of the deal, Creative Media paid $3.4 million in transfer tax to the City of Oakland.

CIM and Creative Media are intertwined, despite the distance between L.A. and Dallas.

Creative Media CEO Barry Berlin is a managing director for CIM, and its Chief Financial Officer David Thompson serves as CIM’s CFO. Both are paid by CIM Group and not by Creative Media, according to the Business Times, citing regulatory filings.

The Creative Media website names David Thompson as its CEO, and Berlin as CFO.

Karen Diehl, a spokesperson for both CIM and Creative Media, told the Business Times that each has a distinctive investment role.

While CIM has a limited holding period for assets, she said, Creative Media has “a long-term investment strategy.” Both entities believe the Oakland market is strong.

Creative Media owns 1.3 million square feet of offices. Diehl said in the email that it is shifting its focus from the office sector to multifamily, and is boosting its apartment portfolio.

In the first quarter, it bought its first apartments at Channel House and 1150 Clay, plus a 75-unit apartment complex in Los Angeles’ Echo Park, according to regulatory filings.

Creative Media and CIM Group are also working on Town Tower, a 550-unit apartment complex at 325 22nd Street in Oakland, first proposed as an office tower.

This month, Creative Media’s board rejected an offer from XYZ.com’s Daniel Negari to buy the REIT for $201 million, saying it “substantially undervalues” the business.

In the first quarter, Creative Media reported a net loss of $12.7 million, an increase from the $8.9 million net loss the prior period and the $2.8 million net loss in the first quarter of last year, according to a financial filing. Creative Media also reported it held about $958 million in assets in the first quarter, up from $690 million in the fourth quarter.

— Dana Bartholomew