EMERYVILLE — A veteran real estate firm is poised to grab ownership of a top-notch East Bay office building at a steep price reduction, a fresh sign of a faltering Bay Area office market.
Still, the weakness in the region’s office sector also presents an opportunity for Blox Ventures to orchestrate a turnaround for an East Bay office building once the real estate company owns the property next to the high-profile Emeryville Public Market.
Shared spaces within an office building at 6001 Shellmound St. in Emeryville. (Blox Ventures)
Blox Ventures has bought the loan whose collateral is the eight-story office building at 6001 Shellmound St. in Emeryville.
With its purchase of the loan from PNC Bank, Blox Ventures will be able to foreclose on the loan and become the new owner of the office building, which totals 109,300 square feet.
Blox sees plenty of potential in the Emeryville market.
“Emeryville is a leading innovation hub in the Bay Area,” said Blox Ventures chief executive officer Jason Oberman.
The building is only about 60% occupied, which means Blox has the opportunity to revive the office property’s fortunes by attracting tenants.
Blox Ventures paid just under $6.8 million to buy the loan secured by the Emeryville office building, which equates to roughly $62 a square foot.
The price that Blox paid to purchase the property’s mortgage is about 68% below the amount of the building’s $21.6 million loan, which matured and became due and payable in December 2024.
This means Blox, as the new owner of the loan, can foreclose on the unpaid financing and take ownership of the building.
To be sure, Blox’s bargain-basement price to obtain the loan points to a big-time decrease in the office building’s value.
Nevertheless, the low cost to buy the financing instrument also enables Blox to offer the building for rent at a greatly reduced price compared to other buildings in this part for the East Bay, including those in nearby downtown Oakland.
In recent years, Blox staged a successful turnaround for another big commercial property in the Bay Area.
San Francisco-based Blox Ventures teamed up with New York City-based investment firm Angelo, Gordon to buy a mixed-use complex of offices, shops and long-vacant supermarket space in Palo Alto for $78.3 million.
Blox and its partner eventually landed specialty grocer Real Produce International Market to fill the long-empty grocery store space in the Palo Alto complex on El Camino Real.
Buoyed by the leasing success, Blox and Angelo, Gordon sold the complex in 2020 for $103.6 million — an eye-popping profit of 32%.
The same sort of turnaround could be possible with the Emeryville office building — if Blox Ventures can find tenants for the property.
Blox noted that several dynamic companies are located in the vicinity of the office building.
“With global leaders like Pixar Animation Studios, Bayer and Novartis, along with the area’s expanding residential offerings, the long-term potential of this property is very promising,” Blox CEO Oberman said.
