Healthcare provider Kaiser Permanente will get $26 million and a pass on earthquake safety retrofits with the sale of an Uptown Oakland office to regional transit agency BART.
BART’s board has approved the deal, and plans to use the building as headquarters for its police force, the San Francisco Business Times reported.
The price of the 105,000-square-foot building at 2000 Broadway comes to around $250 per square foot, but that’s not the end of the investment. BART also plans to spend three or four times as much — somewhere between $74 million and $96 million — for seismic upgrades and other renovations.
That puts the price in the range of $900 to $1,200 per square foot.
BART has indicated it plans to use federal funding or issue bonds to pay for the renovations.
The deal, which is expected to close in August next year, would be a rare sale of a major commercial property in Oakland since the pandemic ended. BART’s status as an owner and tenant, and its willingness and apparent ability to fund the pricey renovations needed on the property, render it less than a clear comparison for the market.
The Oakland office market had an availability rate of 33.4 percent in the third quarter, according to a CBRE report, a figure that includes both vacant offices and space for sublease.
The Kaiser deal could have a knock-on effect for another BART-linked project — a proposed transit-oriented development at the Lake Merritt station that includes more than 500 homes.
BART’s police force will apparently leave its current headquarters of 55,000 square feet at 101 Eighth Street, which is due for demolition as part of the Lake Merritt project.
Kaiser has plans to move 10 percent of its employees from Oakland to Pleasanton. The healthcare provider did not return a call comment by the Business Times.
– Jerry Sullivan