Oakland: Uber seeks sale of office building in effort to consolidate S.F. headquarters
Beleaguered Uber is seeking to sell Uptown Station, the massive former Sears building in Oakland that it bought two years ago to create an East Bay office for 2,000 to 3,000 employees.
“As we look to strengthen our financial position so we can better serve riders and drivers for the long term, we’re exploring several options for Uptown Station, including a sale,” Uber said. “We remain committed to serving Oakland and our broader hometown Bay Area community.”
The year has been marked by scandals and turmoil at Uber, leading to the ouster of CEO Travis Kalanick in June. The company’s search for a new CEO is complicated by internecine fighting among its directors and investors.
The potential sale of Uptown Station, which was first reported by the San Francisco Business Times, fits into Uber’s broader efforts to cut losses and make a profit, it said. Despite its travails, Uber saw bookings of $8.7 billion in the second quar-
ter, up 17 percent compared with the first quarter, and double the amount in the same period last year. The financial results were first reported by the Axios website and confirmed by Uber. The company said it lost $534 million on adjusted net revenue of $1.75 billion for the quarter. (Bookings roughly represent the fares paid by passengers to drivers, while net revenue represents Uber’s commission.)
Uber has also sought to cut losses in other areas. It sold its Chinese business to rival Didi Chuxing last year. A month ago, it merged its Russian business with rival Yandex, which will control the new company — and the Russian market.
Besides fixing its financial position, Uber needs to overhaul its corporate culture, too. Former workers have alleged a sexist environment rife with mismanagement, and the company brought in the law firm of former U.S. Attorney General Eric Holder to investigate the problems. The company said that consolidating its employees in one location, rather than in several Bay Area offices, would help this effort. Uber is constructing two new buildings for its headquarters in San Francisco’s Mission Bay neighborhood and is in talks with the Golden State Warriors for other potential space there. Its plan has always been to move out of its current MidMarket headquarters when the Mission Bay space is complete, a spokesman said.
Newmark Knight Frank is handling the sale of Uptown Station. Located at 1955 Broadway, it occupies almost an entire city block atop the 19th Street BART Station and in the middle of Oakland’s rapidly growing Uptown neighborhood. It opened in 1927 as the H.C. Capwell department store, and housed Sears from 1996 until 2014. It has been vacant since then.
Commercial real estate sources said that the building, with 318,266 square feet of office space and 52,522 square feet of retail, would probably sell for about $600 per square foot. That would result in a sales price of $222.47 million —about $100 million more than the $123.5 million that Uber paid two years ago.
Uber has spent an undisclosed amount during the past two years to overhaul the historic building, which was severely damaged in the 1989 Loma Prieta earthquake. Plans included opening up long-closed windows that had been sheathed in concrete and steel reinforcements. Two years ago, Uber said it expected to spend $40 million on rehabbing the structure.
Construction is expected to be finished in the second quarter of next year.
Uber already had pulled back on its Oakland plans. In March, it said it would house only a few hundred employees at Uptown Station and would rent out the remaining space.
“In the last two years, major companies like Oracle, WeWork, Blue Shield and now Delta Dental have moved into Oakland,” said Mayor Libby Schaaf. “There are few locations in the region which offer such an array of social, economic and transportation benefits as Uptown Station. I look forward to working with the lucky buyer who hopefully will share Oakland’s values of diversity, inclusion and equity.”
The Greenlining Institute, an Oakland nonprofit, had protested Uber’s Oakland plans with a #NoUberOakland campaign, fearing that the influx of well-paid tech workers would accelerate gentrification unless Uber committed to diverse local hiring, promoting affordable housing and other issues.
“Uber backing out of Oakland tells us they weren’t ready to work with the community,” said Orson Aguilar, Greenlining president.
Uber said it does remain committed to the East Bay city, and pointed to a $70,000 donation for a college fund for Oakland high school students, and $30,000 worth of rides it provided to local organizations.
Aguilar’s hope is that community organizations, backed by local millionaires, could join forces in a longshot effort to buy Uptown Station and use some of the space for public benefits, such as a training center for displaced workers. “Since Uber owns the building, it could do a lot with special financing,” he said.