OAKLAND, CA—The property at 412 Madison St. was previously a recycling center, but plans now call for environmental cleanup and use of reclaimed materials to transform the site into a mixed-use development. Real estate development company Swenson expects to break ground on its first Oakland project this month.
“A unique mix of industrial and commercial space, this area has the potential to be so much more,” said Bill Ryan, Swenson senior vice president of development. “We are excited to recycle this vacant building into something more dynamic and reflective of the local urban environment and the community it serves.”
Meeting Oakland Green requirements, the site will become 157 multifamily units over ground-floor retail encompassing 94,993 square feet. The site will offer a public art installation and amenities including a pet wash/walk, a sky terrace, business centers, a game room, bike storage and a ride share pick up/drop off.
“The industrial component makes it one of the first in Oakland,” Ryan tells GlobeSt.com. “Construction challenges would be the cost. Luckily, Swenson is working in house for all of that to help cut costs. Other than that, we don’t predict challenges that are different from any other construction project.”
Situated along the Oakland/Alameda estuary, historic waterfront district Jack London Square has become a destination bringing together food, entertainment and events. This property will be located near restaurants, breweries and wineries, and within walking distance to BART.
“We were first attracted to invest here due to resurgence of the historic waterfront district, and the diverse and authentic experiences being offered,” said Ryan. “Jack London Square is really growing and becoming a vibrant neighborhood. It’s reminiscent of what we first saw when we invested in downtown San Jose over 30 years ago. This site being in an opportunity zone was just a bonus as it provided an extra incentive to become part of something bigger.”
Strong asset appreciation continues to drive multifamily investment in the East Bay as the average price per unit has risen 25% to $290,600 since the end of 2016, according to a report by Marcus & Millichap. While the recently implemented statewide rent control measure may impact appreciation rates moving forward, Oakland’s strengthening economy and expanding white-collar labor force remain strong selling points to many buyers. Downtown Oakland will stay popular for investors seeking class-C assets as units can be purchased for the metro average and cap rates in the mid-4% range can be attained, says the report.