Great Teachers’ Retirement System plans new tower in downtown Oakland

OAKLAND — The nation’s largest teacher retirement system and a major real estate player have teamed up to offer a new office tower in downtown Oakland, according to public filings.

California State Teachers’ Retirement System (CalSTRS) has partnered with Boston-based Beacon Capital Partners in a proposal to develop a new tower near Lake Merritt in downtown Oakland, according to planning documents and public commercial records.

The proposal envisions a “new high-rise” consisting of “commercial space” that would total “more than 100,000 square feet,” according to a very preliminary proposal filed with the Oakland Planning Department.

The potential project would be built at 1956 Webster St. in Oakland, according to planning documents.

1956 Webster St. in downtown Oakland, a four-story office building near 20th Street. (Google Maps)

Currently, the site houses a four-story office building totaling 42,300 square feet, according to city records.

The development alliance intends to demolish the four-story building and replace it with a commercial tower, as outlined in the preliminary proposal.

The standard planning definition of the term ‘commercial’ combined with the realities of a tower development would suggest that the building would be primarily an office, although it could also include retail or restaurant space on the ground floor. .

Through separate affiliates, the California Teachers’ Retirement System owns both the 1956 Webster Building as well as an adjacent office tower and a one-story restaurant and retail building at 1999 Harrison St ., in Alameda County.

CalSTRS bought the two properties in 2016, paying a total of $235.5 million.

The Teachers’ Retirement Group paid $224.75 million for the 1999 high-rise, one-story Harrison Building and $10.75 million for the 1956 Webster Building.

The prices were disclosed through both county grant deeds as well as staff memos related to a dispute in which the state’s teachers’ pension system required the county to reimburse documentary transfer taxes. for the purchase of the property. The county denied the request.

In recent years, an increasing number of developers have become interested in the construction of towers, office or residential, in downtown Oakland.

However, the vast majority of these proposals have yet to see the light of day amid the economic uncertainties triggered by the coronavirius.

Still, commercial and residential real estate experts believe Oakland could continue to generate interest because it’s seen as an inexpensive alternative to San Francisco for some office tenants and is a hub for public transit, including several BART stations.