Tower

plex at the corner of Telegraph Avenue and 16th Street. The 14-story building totals 116,000 square feet.

Downtown Oakland is gaining growing interest because a spike in office rents in San Francisco has forced some tenants to defect to the East Bay, which in turn has made prime office buildings in Oakland more valuable, observers say.

“We expect that the Oakland office market will continue its positive trajectory because of strong tenant demand and extremely limited supply,” said David Cropper, TMG’s director of development, explaining the purchase of the 1221 Broadway office tower.

KKR also believes downtown Oakland has a major upside potential.

“Oakland has attractive long-term secular growth trends driven by its accessibility to transit, a growing retail amenity base, and a meaningful amount of residential development,” said Justin Pattner, a KKR executive.

1221 Broadway is 98 percent leased, and tenants include Clorox, Stanford Health Care, Wells Fargo, Parsons Brinkerhoff and Verizon, according to Newmark Knight Frank commercial real estate agents Steven Golubchik, Tyler Meyerdirk and David Hosler, who helped arrange the deal.

“As the largest single asset sale in the history of Oakland, this transaction speaks to the strength of the Oakland market,” Golubchik said.