OAKLAND — A historic downtown Oakland office tower that’s described as the East Bay city’s “original highrise” has been returned to its lender, a fresh indicator of the worsening weakness in the Bay Area office market.
The transaction provides clear indications that the value of the building, constructed from 1903 to 1911, has shriveled in recent years. At the time of the purchase, the coronavirus was still ongoing. Even so, real estate players gambled that companies would return to their workplaces after government-mandated business shutdowns had emptied out the vast majority of office spaces.
As a result, many office buildings continued to suffer brutally high vacancy levels and flat rental rates, which helped to erode the value of the properties in numerous instances. The debt amount also is 45.3% below the building’s property value of $46.6 million, as estimated by the Alameda County Assessor’s Office. Brightspire took ownership through a deed in lieu of foreclosure, county documents show.California businessman and real estate executive Francis Marion “Borax” Smith constructed the building from 1903 to 1911. A marketing brochure that commercial real estate firm CBRE had previously circulated described the building as “Oakland’s original highrise.