Ellis Partners, in a joint venture with Intercontinental Real Estate Corporation, has acquired a vacant parcel in downtown Oakland, CA, known as 1100 Broadway.
The acquisition includes the dilapidated, historic Key System building, which holds 34,000 square feet across seven floors of commercial space.
The new ownership plans to build a new Class A office tower on the site, restore the vacant building to its original splendor, and integrate the two.
The Key System building, built in 1911, was the headquarters of the Key System Railway which transported East Bay residents locally and across the lower deck of the Bay Bridge to San Francisco.
The new ownership acquired the site from a partnership operated by SKS that purchased the lot and vacant building in 2008. "We are grateful to our friends at SKS for the groundwork they put in place at this important Oakland site," said Melinda Ellis Evers, Managing Principal of Ellis Partners.
JLL's Capital Markets team of Michel Seifer, Rob Hielscher and Erik Hanson brokered the transaction. The acquisition price was not disclosed.
"This is a very significant deal for Oakland," said James Ellis, Managing Principal of Ellis Partners. "We are honored to be in a position to transform such an important block in the middle of downtown. We look forward to delivering a newly designed, state of the art office tower that reflects Oakland's unique spirit."
This transaction comes at a dynamic time for Oakland. Demand for Class A office space is high and Oakland continues to play a key role as an economic driver for the region. In addition, the market conditions are ripe for a new development that sits right on top of the 12th Street/City Center BART station, which is the primary transfer point for the system.
The project promises to bring dynamic new space to Oakland. The new ownership has hired Gensler to redesign the currently approved building on the site. The site's zoning allows for a tower of up to 420,000 square feet although the current plan is to revise the existing plans more in line with the previously approved 320,000 square foot building.
"This kind of space is especially valuable in today's marketplace. Employees and employers want Class A space that is transit friendly, modern, green, and inclusive of modern amenities," added Will Miller, Senior Vice President for Ellis Partners.
The ownership has hired Chris Roeder, Sam Swan and Jon Elder, of JLL to lead the leasing efforts for the new Oakland icon.
Eastdil Secured helped to arrange the first partnership between Ellis Partners and Intercontinental Real Estate Corporation, a national real estate investment, development and management firm headquartered in Boston.
"We are very excited about our new investment in Oakland and the opportunity to partner with Ellis on this project. We have been evaluating opportunities for ground-up development in this market for some time and look forward to finding other ways to participate in the vibrant Bay Area economy," said Jessica Levin, Intercontinental's Senior Director of Acquisitions. Intercontinental's Chief Investment Officer, Tom Taranto added, "Our decision to invest in this quality union project is a direct result of our investment plan.
Intercontinental's strategy is to continue to build and acquire premier assets in vibrant markets throughout the country."
The ownership also announced today that it has an undisclosed, long-term lease for a minimum of 130,000 square feet in the lower floors of the new tower.
The ownership plans to break ground late this year and open the building in 2019.