Iconic ZO Oakland Apartments changes ownership after property owner fails to meet loan obligations

Oakland, California – In a major change influencing Oakland’s real estate scene, a well-known downtown building at 1700 Webster Street has been purchased by its lender due to the failure of the property owner to manage their loan commitments. Based on most recent documents in the Alameda County Recorder’s Office on August 28, the building—ZO Oakland Apartments—was taken over under a deed in lieu of foreclosure.

Towering 24 floors high and with 206 residential units, ZO Oakland Apartments has been a striking sight against the Oakland cityscape. Built by Suffolk Construction, it represented a rebirth in urban growth for Oakland and the first skyscraper building started there since 2008.

Designed by an offshoot of the Portland-based real estate company Gerding Edlen, the project was finished in 2019 with great hopes. But financial problems have cast shade over this great accomplishment. Based in Washington, D.C., the developer obtained a $90 million loan from The Union Labor Life Insurance Co. in 2020. At the time the property was seized, the unpaid balance on this loan stood at $89.8 million, nearly the full amount borrowed, showcasing the financial distress faced by the property owners.

Now that the insurer is in charge, the fate of ZO Oakland Apartments now hangs in the balance. Although the insurer’s intentions for the property are still unknown, these kinds of circumstances usually result in the property being sold to new investors or run under management by a new company to help pay back the loan until the full amount is paid back-off.

Attractive to a wide spectrum of tenants, the residential tower presents a combination of studio, one-bedroom, and two-bedroom apartments. ZO Oakland Apartments boasts roof deck pool, both indoor and outdoor lounges, and a range of services meant to improve urban living. These include a boutique fitness facility, an outdoor terrace with grilling stations and fire pits, and even pet-friendly amenities with outdoor play areas and a pet spa.

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Despite these appealing qualities and a perfect position close to Lake Merritt that encourages an active lifestyle, the financial difficulties have caused a major change in ownership. The event emphasizes the erratic nature of real estate investments as well as the effect of economic constraints on famous buildings. The emphasis remains on how the change will impact the tenants and the larger community in downtown Oakland even as the new chapter for ZO Oakland Apartments starts.