Lakeside Group’s Isaac Abid Bets on Oakland’s Comeback

Developer Isaac Abid is all in on Oakland.

Even as the East Bay city reckons with a continued rise in office vacancies, the loss of another professional sports team, and ongoing concerns about crime and safety, Abid said Oakland has a one-of-a-kind culture that will assure a comeback.

“It’s hard to put into variables and in a spreadsheet,” he said. “But that’s how I feel.”

Abid thinks the city’s recovery will be stronger and faster with the help of its business community. Earlier this year, he started NorthLake, a neighborhood improvement group privately financed by many of the commercial owners in Uptown Oakland, where Abid’s newly formed Lakeside Group recently bought 180 Grand. He is also leading one of the efforts to recall Alameda County District Attorney Pamela Price in the Nov. 5 election, with his Revitalize East Bay Committee donating more than $250,000 to the recall campaign since it launched this summer, according to a KQED analysis.

Abid said the recall is not about having a D.A. that is seen as being tougher on crime, or hitting a certain quota on prosecuting cases, but “if all of a sudden you see basically a departure of the infrastructure, then one takes notice,” especially when both the crime itself and the perception of it has been an increasing burden on the city’s already hard-hit retail sector.

In addition to the recall, the committee has donated to campaigns for Oakland City Council candidates Warren Logan, who led the city’s Community Resilience Team during the pandemic under then-Mayor Libby Schaaff, and former police chief LeRonne Armstrong. It is also supporting Emeryville’s pro-housing City Council Member John Bauters, who is running for the county Board of Supervisors.

Abid sees the new committee as lasting well beyond the upcoming election and becoming akin to moderate political groups like Neighbors for a Better SF, Together SF and more that have sprung up in San Francisco in the last few years, with a similar mix of real estate, tech, big and small business owners, and neighborhood groups coming together “in the service of a longer term strategy.”

“I think right now what real estate needs is not too different from what corporate needs, and not too different from what people in the community need. So that has galvanized this coalition and I’m a part of that,” he said.

In another community building revitalization effort, he started the Downtown Oakland Partnership with the Oakland Chamber of Commerce, bringing together stakeholders in Downtown, from building owners to major tenants like PG&E. These are the people who will commit to sticking with the struggling city even through the downcycle, he said.

“The organizations and stakeholders that stay when times are tough are committed,” he said. “They’re here as things are getting challenging, and that certainly provided me with some energy.”

Given that Abid both invests in Oakland and lives there with his wife, Puja, who is also Lakeside’s COO, and their children, his political efforts straddle the line between his work and personal life.

“Obviously, the outcome of how government performs is going to necessarily impact all the other work I’m doing, and I have a point of view on it. But I can kind of bifurcate the work at hand in terms of the work I’m trying to do for the real estate business and in the community with Northlake and my work within the political realm.”

San Francisco-based TMG Partners is working with Abid on many of these efforts and Denise Pinkston, the firm’s managing director of land use and policy, said Abid is a “fabulous example” of what can happen when local developers get involved in creating change.

“Part of what we do as property owners is we get engaged when something’s not working in the community where we own and invest,” she said, adding that owners like Abid are taking their development skills beyond their front doors and onto the sidewalks, squares and parking lots where it is desperately needed.

“Turning that skill set into city building is absolutely appropriate. It has worked in other cities across the U.S. and we should be bringing that toolkit to Oakland, so I am a huge fan of Isaac and all the work he’s doing,” she said.

Grand plan

Abid said he has always had eyes for Oakland.

In 2014, when he left AIG Global Real Estate in San Francisco to join his long-time friend Sumeet Parekh at San Diego-based HP Investors, he had a chance to invest in the city just as it was taking off in the aftermath of the global financial crisis.

“Libby Shaaf was elected mayor. There was a lot of buzz happening. Oakland started to develop a vibe,” he said. “I came up here at 35 years old, opening HP’s Oakland office, and it was really exciting. I felt like I was on that wave.”

He could have stayed with HP Investors after that wave came crashing down during the pandemic. Abid said he understands why HP, as outsiders, are ready to divest from the city where he led its efforts to build up a 500,000-square-foot portfolio of office, mixed-use, retail and industrial space.

“When the cycle changes, capital from out of town naturally looks to other things and isn’t vested in the community the same way,” he said.

But instead of backing away, the difference of opinion led him to double down on Oakland and form Lakeside Group.

“It was time to go out on my own and really lean in on what I thought was both an opportunity for me personally, and that passion to continue to invest in Oakland, but also what I thought could be a really tremendous investment opportunity,” he said.

Just as Abid was having conversations with HP about starting his own firm in the first quarter of this year, the distressed $95-million loan on 180 Grand Avenue, a 15-story office tower across the street from Lake Merritt, hit the market.

The timing felt “serendipitous,” Abid recalled, and a great opportunity to buy a prominent building that is “inextricably tied” to the NorthLake District he has been trying to build up.

Lakeside and Rubicon Point Partners were able to pick up the debt for just over $100 per square foot, or about $30 million — 75 percent off its last sale in 2017 for $119 million. Abid said there were around five other parties interested in the deal, and while that’s “not as many as the lender probably wanted,” it’s still an indication that there is interest out there for investment in the East Bay city.

Rubicon will manage the building, he said, and working with the San Francisco-based investor-operator was another key attraction to the buy. With debt so expensive, Abid said, “you might as well call your friends and figure out where you have synergy and do deals with them.”

The low cost basis allows the team to put money into turning the 276,000-square-foot building’s nine-story public parking structure into “the garage of choice” for those who want to park their car safely to visit the neighborhood’s shops and restaurants, he said. Previous owners Harvest Properties and KKR had invested “a significant amount of capital” in the building itself, but Abid said he wants to spend about $5 million to reposition the property as “a little bit boutique,” with concierge services, a lobby redesigned by Gensler and future plans to “reactivate” the ground floor. These efforts will help separate the building from the rest of the inventory competing for tenants and help fill the 65 percent occupied building, he said.

“I think you’ll see a recalibration of the market that is just going to naturally take place here over the next few years, and we’d want 180 Grand to be a key part of that flight to quality,” he said.

Of course many downtowns have similar problems to Oakland, with shuttered stores and empty offices. But Abid said that by the end of 2022 and into 2023, it was clear that the city, like San Francisco, was not coming back to life with the same speed as other urban centers.

“The rest of the country was turning the page a little bit and San Francisco was continuing to suffer,” he said. “Oakland really started to suffer.”

To a certain extent, Abid said, Oakland’s futures are tied to San Francisco’s because of the perception that the two are linked in the regional economy. But he believes investors would be wise to think of the East Bay city as an entity unto itself.

“Oakland, from my perspective, doesn’t need San Francisco to be successful or not. There are a lot of things about Oakland that can allow it to succeed just fine independently,” he said. “Some people think that it’s highly correlated. I think that maybe it’s less so.”

He is still tied to HP as he continues to steward the legacy properties it bought during his tenure, and declined to comment on what the long-term divestment plan is. He also intends to continue making new investments in the city under the Lakeside banner. While HP Investors focused more on sub-institutional deals, he said Lakeside will look at bigger deals. Investors will likely be both institutional and local, he said, and they will have to take a long term view.

“Things could spring back in a year. Things could spring back in five years. It could take 10 years,” he said. “Anyone who tells you anything differently would be just lying to you because these are uncertain times.”