By Sarah Klearman
Publication: San Francisco Business Times
Coworking and event space company Oakstop has purchased its flagship office building in downtown Oakland, the firm announced Tuesday.
The company paid $8 million for 1721 Broadway, a 25,000-square-foot, three-story office building, in partnership with San Francisco cultural nonprofit Community Arts Stabilization Trust. The sale, which amounts to $320 a square foot, closed April 11.
Oakstop began as a 4,000-square-foot tenant there in 2014 and gradually expanded to occupy the entire building in the last year, founder and CEO Trevor Parham said Tuesday. The company provides work, event and gallery space to entrepreneurs with a particular focus on communities of color.
The organization began working on a sale with CAST in March 2021, Parham told me. He repeatedly approached the building owners, listed as Kwon Yangja and Poustinchian Mohamad, to voice interest in buying the property, also known as 1715 Broadway, to no avail.
“They finally came to me and said, ‘You know what, we’re thinking about this. Can you put forth a proposal?’” he said.
CAST ultimately provided $2.5 million in equity with the goal of having Oakstop buy it out of the building, Parham said. Oakstop also received a loan from San Francisco-based community lender Community Vision. Both groups are Oakstop members.
The sale may suggest a broader willingness among Oakland office landlords to look to community-focused players like Oakstop, whose goal is to use real estate as a path to economic development and community empowerment. It offers day passes for as little as $15, and more than 500 organizations — many of them Black-owned — rely on its services, Parham said.
You can read more about Oakstop’s growth over the last few years in this article my colleague Ari Mahrer wrote this past February. And read more about Parham, whom the Business Times named Executive of the Year in 2020, in this profile.
Oakstop’s model, Parham said Tuesday, could replace the more traditional institutional investors who have historically purchased office buildings, signed anchor tenants and then collected rent. Where Oakstop was at 100% occupancy pre-pandemic, it’s at roughly 90% today, he told me. The company has done little “hard marketing,” he said.
Total office availability in Oakland’s core business district, which includes Uptown, climbed to 32.1% in the first quarter, according to data from real estate services firm CBRE. Market observers continue to tell me that tenant interest remains generally muted.
Parham, for his part, is optimistic: Oakstop has over time expanded its total leased footprint to some 80,000 square feet across five locations in Oakland and one in Richmond. It is hoping to use the 1721 Broadway building as leverage to purchase additional buildings in the future.
He said being an owner-operator will allow it to make improvements to the building and eventually give it the flexibility to offer lower rental rates. Oakstop will celebrate the acquisition of 1721 Broadway at a ceremony May 19.