Oakstop, a coworking and event space provider, announced on Tuesday that it had purchased its headquarters office building downtown Oakland.
In partnership with the San Francisco nonprofit Community Arts Stabilization Trust, the company paid $8,000,000 for 1721 Broadway. The three-story, 25,000-square foot office building is located at 1721 Broadway. The sale, which equates to $320 per square foot, was completed on April 11.
Oakstop started as a tenant of 4,000 square feet in 2014. It expanded gradually to take over the entire building last year, said Trevor Parham, the founder and CEO. The company offers work, event, and gallery spaces to entrepreneurs. It focuses on communities of colour.
Parham informed me that the organization started working on a deal with CAST as early as March 2021. Parham tried to reach out to the building owners listed as Kwon Yahja and Poustinchian Mohamad to express interest in purchasing the property also known as 1715 Broadway.
They finally came to see me and told me, "You know, we are thinking about it. "Can you make a proposal?" He said.
Parham stated that CAST provided $2.5m in equity to help Oakstop purchase the building. Oakstop received a community loan from Community Vision, based in San Francisco. Both groups are Oakstop Members.
This sale could indicate a greater willingness on the part of Oakland office landlords, who are looking to players with a community focus like Oakstop. Oakstop's goal is to leverage real estate to promote economic development and empower communities. Parham says that it offers day passes as low as $15 and more than 500 organisations, many of which are Black-owned, rely on the services.
Ari Mahrer, my colleague from February 2016, wrote an article about Oakstop and its growth in the past few years. You can read this profile to learn more about Parham who was named Executive of 2020 by the Business Times.
Parham, who spoke Tuesday, said that Oakstop's business model could replace traditional institutional investors, which traditionally purchased office buildings and signed anchor tenants, then collected rent. He told me that Oakstop's occupancy rate is now about 90%, down from 100% pre-pandemic. He said that the company had done very little "hard marketing".
CBRE data shows that the total office availability in Oakland’s core business district - which includes Uptown - grew to 32.1% during the first quarter. According to market observers, tenant interest is still generally low.
Parham is optimistic. Oakstop's total leased space has grown over the years to 80,000 square foot across five locations in Oakland, and one in Richmond. It hopes to leverage the 1721 Broadway property to buy additional buildings in future.
He said that being the owner operator will allow them to improve the building, and give them the flexibility to eventually offer lower rental rates. Oakstop will hold a May 19 ceremony to celebrate its acquisition of 1721 Broadway.