“The Towers” office complex sold. City Stiffed?
The San Francisco Business Times has reported that Southern California-based real estate investment trust KBS Realty has purchased the three buildings in the Emeryville complex known as “The Towers” in what was the biggest East Bay office deal of 2014. The sale went through four days prior to when recently passed Measure V went into effect, avoiding the estimated three million dollars the city would have collected from its transfer to fund city services & infrastructure projects.
The city passed Measure V for this precise purpose: to collect a transfer tax on the sale of larger commercial properties. Instead the city will collect roughly $137,000 (half of the 0.11% County transfer tax, with the other half going to Alameda County). The timing is conspicuous and I don’t think it’s too presumptuous of me to suspect that this deal may have been expedited to avoid paying the additional 2.7 million in taxes. The City also missed out the recent sale of the Bay Street Mall to UBS Realty Investors for $289 million in Q3 of last year (UBS has reportedly retained Madison Marquette for mall management).
Photo Credit: Regus.com
The bloody and costly battle between Realtors and the city during last years election could have been avoided according to All East Bay Properties owner Jason Crouch “We were never opposed to a Commercial transfer tax and it’s unlikely it would have been met with any resistance. We opposed a residential tax and still think the percentage that the city claims will come from this in a typical year is misleading and will ultimately hurt the private homebuyer more”.
KBS, a private real estate investment trust (REIT), closed the deal to buy the three buildings from Irvine-based LBA Realty for about $250 million, or $305 per sq. ft, on December 28th. The 1980’s built office complex consists of mostly leased space by corporate tenants including AAA, Gracenote & UCSF. LBA did a nice “flip” of the property having paid only $130 million for the buildings just four years ago during the heart of the financial crisis when the property was in foreclosure and suffering from a forty percent vacancy rate. LBA renovated and retrofitting the complex with new corridors, landscaping, parking lots & HVAC systems.
Read More on The San Francisco Business Times →
Feature Image Photo Credit: LBA Realty
[Annotation] We had originally used the term “Gypped” in the headline which could be construed as derogatory. No offense was intended.