Huge rent hike drives BART out of Oakland headquarters

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.”