Even BART isn’t safe from rent hikes.
The transit agency currently faces an astronomical rent increase at its Oakland headquarters, one that has left BART’s governing body looking for a new place to call home.
At Thursday’s regular meeting, BART will consider whether or not to buy a building at 2150 Webster in Oakland after it leaves its current headquarters at 300 Lakeside Drive.
The accompanying staff report explains the crisis of a looming 60 percent rent hike in the next two years:
In June 2003, in order to consolidate BART’s office space, the BART Board authorized the general manager to execute a longterm lease at 300 Lakeside Drive, Oakland (LKS). BART is currently leasing 369,587 rentable square feet. [...] BART’s current blended base rent for LKS is approximately $34 per square foot.
[...] BART’s current LKS lease will expire on July 18, 2021. BART has the option to extend the lease for two additional 5-year periods, at [...] approximately $62-64/square foot. This expected 60 percent increase in LKS rental costs is due to current market conditions in the Bay Area and continuing tenant demand in Downtown Oakland.
A BART real estate committee weighed the options of either staying at the current Lakeside Drive locale with less space, or moving to either 2150 Webster or a competing locale at 601 12th Street.
The agency concluded that purchasing 2150 Webster “provides the lowest cost option,” and perhaps would avoid this same rent-increase problem down the line. The actual purchase would run $140 million, plus $2 million in closing fees.
However, the report also estimates an extra $85 million in work to be done on the headquarters once completing the purchase, raising the total cost to $227 million.
Thursday’s vote will consider whether or not to authorize $230 million worth of sales tax bonds to cover the moving costs.
According to developer Lane Partners, 2150 Webster is a “10-story office building [...] currently undergoing a complete renovation that will be completed in Q4 of 2018.”
Lane Partners bought the building from AT&T in 2015. The developer also notes that, appropriately enough, it’s located a mere “two blocks to BART.”