Vertical Ventures loses Oakland office campus after $38M default

Lender Ares Commercial seizes two-building complex near Oakland International Airport

Vertical Ventures Loses Oakland Office Campus After Default
Vertical Ventures' Hamid Rezapour with The Landing at 303 and 333 Hegenberger Road in Oakland (Vertical Ventures)

A lender has seized a two-building office campus in south Oakland through foreclosure after Vertical Ventures defaulted on a $37.5 million mortgage loan.

Ares Commercial Real Estate Management, based in Los Angeles, took control of The Landing, a 198,200-square-foot campus at 303 and 333 Hegenberger Road, reported.

An affiliate of Walnut Creek-based Vertical Ventures bought the four- and eight-story office buildings near Oakland International Airport in 2019 for $40.6 million, or $205 per square foot.

The newly renovated offices were 82 percent leased at the time of purchase, according to the company’s website.

Ares Commercial seized the 56,000-square-foot and 142,800-square-foot buildings in a foreclosure that valued the campus at $14.75 million, or $75 per square foot. 

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The value of the property fell nearly 64 percent from its last traded price. The current occupancy of the office campus was not disclosed.

Vertical Ventures described The Landing, built in 1970 and 1974, as a choice office site — with a 1.9 equity multiple and a projected internal rate of return of 17.1 percent over four years.

 “This is a desirable Oakland location easily accessible from Oakland International Airport and Interstate 880,” the firm said on its website this week.

Vertical Ventures, founded in 2004 by Hamid Rezapour, focuses on buying under-valued office and industrial properties within supply-constrained markets in Northern California, according to its website, with additional investments in Arizona, Texas and Southern California. Its assets under management were not disclosed.

— Dana Bartholomew

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