Office Space: Commercial Office Building Sales
East Bay Business Times, May 13, 2005
Prentiss plans to buy 1333 B’way
Katherine Conrad
Stepping up its buying spree in Oakland, Prentiss Properties Trust now proposes to purchase 1333 Broadway from San Francisco-based ATC Partners LLC.
“We’re trying and we think we will succeed. Our intent is to buy it,” said Mike Keely, regional director of leasing for Dallas-based Prentiss. “But we’re a publicly traded company so we can’t pre-announce our acquisitions.”
If the company succeeds, 1333 Broadway will be added to an impressive roster of buildings in Prentiss’ portfolio, including 1901 Harrison St., the Ordway Building at 1 Kaiser Plaza, 155 Grand Ave. and 2101 Webster St. The Webster Street tower was bought last fall for $64.75 million from the estate of Charles Pankow, founder of Pankow Builders.
“We’ve done very well in Oakland,” Keely said. “We like what’s going on in Oakland, especially with all the housing.”
Prentiss now owns 1.4 million square feet of the Lake Merritt market. If the Broadway building closes escrow, Prentiss will compete toe-to-toe with Oakland’s other large landlord, Shorenstein Co., which owns 1.5 million square feet in downtown Oakland market.
The sale of the 10-story Broadway building, which is 95 percent leased, marks a change in investment strategy for ATC Partners and its real estate fund, Lubert Adler of Philadelphia, which bought the Broadway building in 2000 for $31.8 million. That price was considered low at the time. The current selling price was not disclosed, but it was rumored to be about $40 million.
ATC, which also has 300 California St. in San Francisco on the block, is focusing on Class B, suburban office products, according to Mike Halper, ATC’s managing member.
The firm just bought the Woodlands, a two-building, 48,000-square-foot business center in Walnut Creek’s Shadelands business park that is 25 percent vacant. The purchase follows close on the heels of buying West Valley Executive Park in San Jose for $18.6 million.
“The ones that we’re buying is the B product,” Halper said. “It is a switch in strategy, but that’s where the market is and that’s where we’re able to get our returns.”
ATC will be trading such tenants as Providian Financial Corp. and URS Engineers, both of which command three floors in Oakland, for dozens of much smaller tenants in Walnut Creek.
