Three Steps Buys Downtown Oakland Apartment Tower for $78M

Three Steps Properties has picked up a 24-story apartment highrise in downtown Oakland for $78 million.

An affiliate of the locally based investor bought ZO Oakland Apartments, a 206-unit tower at 1700 Webster Street and 330 17th Street, the San Jose Mercury News reported.

The seller was Union Labor Life Insurance, a Washington, D.C.-based lender which seized the apartment complex in August after its developer, Portland, Oregon-based Gerding Edlen Development (now called Edlen & Co.), defaulted on an $90 million loan.

The deal works out to $378,641 per unit.

The high-rise, built in 2019, traded for 39.6 percent less than its assessed value in January of $129.2 million. At the time of sale, Union Labor provided Three Steps with a $65.6 million loan.

When it was built, ZO was the first apartment high-rise to break ground in Oakland since 2008.

The 175,100-square-foot building, with sweeping views of the East Bay, has a rooftop pool deck, a fitness center, an outdoor terrace with firepits and grilling stations, an open lobby with an outdoor patio and “a laid-back lounge for billiards or fireplace hangouts,” according to its website.

Monthly rents range from $1,907 for a studio to $5,000 for a two-bedroom apartment, according to Apartments.com.

The purchase comes four months after Three Steps bought a 34-story, 254-unit apartment tower at 447 17th Street downtown for $99 million, according to the Mercury News.

The deal for the tower, a couple of blocks away from its latest purchase, works out to $389,764 per unit. It traded for 53 percent less than its assessed value.

Three Steps, founded in 2016, owns apartments in Oakland and Richmond, according to its website. It’s led by Marina Dreyfuss, wife of Philip Dreyfuss, a hedge fund manager and partner at Farallon Capital Management, according to the San Francisco Business Times.

Philip Dreyfuss co-led the successful campaign to recall former Oakland District Attorney Pamela Price, and put the most bucks behind the successful recall of disgraced Oakland Mayor Sheng Thao, having contributed more than $500,000.

— Dana Bartholomew