Market Update – Emeryville Watergate Office Towers

Just after the sale of Oakland’s City Center to CBRE Investors yet another property is on the market. The Watergate Office Towers in Emeryville is the latest project to fall victim to the economy. Three of the four towers in the project are on the market. This is sort of an interesting story as Hines fell into default last year and eventually forfeited the project back to US Bank. US BANK picked up Pacific National Bank last year with the help of the FDIC. TMG Partners has been appointed by the bank to temporarily manage the project. TMG has said bids were due August 18th and the money should go hard sometime soon. The property was being marketed by local Eastdil Secured who played a role in the Oakland City Center sale. One interesting fact to point out here is that it is very difficult to value these large projects as they have not been traded in quite some time. Norm Hulberg, president of Hulberg & Associates Real Estate Appraisers, one of the largest appraisal firms in California, said the sale will offer one insight into current values but won’t clear confusion. This is due to the fact that there have been so few sales occurring. Properties with larger vacancies we have seen values drop up to 40%. This will be interesting to follow and see who ends up with this project in their portfolio.