China Construction Bank is seeking a buyer for a loan tied to a Class A office building in Oakland.
The Beijing-based financial institution is selling a $59 million loan secured by the 1333 Broadway building in downtown Oakland, the San Francisco Business Times reported.
The debt amounts to about $242 per square foot.
The 10-story, 244,000-square-foot property has been owned by Swift Real Estate Partners since 2019, when it purchased the building from CIM Group for $115 million, or $454 per square foot. That price was normal for the time, when offices were selling for as much as $550 per square foot.
The building is 74 percent occupied. Delta Dental is the building’s anchor tenant with 128,300 square feet, taking up more than half of the building’s available space across two leases. Elsewhere in the building, a lease for 117,900 square feet is slated to expire in 2028 and a 24,500-square-foot lease is up in 2036.
The building sits on top of the 12th Street BART station and is adjacent to the Oakland City Center mixed-use development. On the ground floor, Walgreens has a 13,700-square-foot lease through October 2044. The pharmacy generated $14.8 million of contractual net operating income through May of this year.
A buyer who purchases the debt could be in a position to acquire the property itself via a deed in lieu of foreclosure. In that situation, the property could sell at a significant loss. Other recent distress sales have amounted to $60 to $100 per square foot.
Earlier this month, for example, 2001 Broadway sold to a private investor for $4.5 million, or $88 per square foot. In January, 1440 Broadway sold to Frontline Realty Capital for $5.2 million, or $58 per square foot, after the lender seized ownership of the property from Tidewater Capital in July 2023.
Nonperforming debt tied to three Swift-owned office properties in California, Oregon and Washington also hit the market this month. That includes the 340,600-square-foot Mount Diablo Plaza in Walnut Creek.
Swift also owns 1111 Broadway, a 568,000-square-foot building in downtown Oakland. It purchased the property in 2021 for $327.5 million, or $576 per square foot — one of the last office sales before building values took a post-pandemic nosedive.
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