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OAKLAND-The Port of Oakland has sold a 23-acre property once slated for a major mixed-use development to a joint venture that includes San Francisco-based Simeon Commercial Properties. The purchase price was $15 million.

Located at Interstate 880 and Hegenberger Road at the entry to the Port of Oakland, the property was originally slated for Metroport, a mixed-use development consisting of one million sf of office, a four-star hotel and 100,000 sf of retail. With the office and hotel markets languishing, however, Simeon, which was selected by the Port to develop the Metroport project, received the Port’s blessing to change the use of the site to pure retail.

“The current economic picture has caused us to adjust the scope of this project since we announced our original plan in 2000,” said Pitto. “Quite frankly, we have allowed the market to dictate the direction and right now, retail development looks like it will be a top priority for Oakland.”

Simeon President and CEO Russell Pitto tells GlobeSt.com there is still a chance the property will include an office component, but the project now is planned as 275,000- to 300,000 sf of big box retailers, restaurant pads and smaller retail tenants, all national in scope. “We are well down the line in negotiations with five different retailers,” says Pitto, who estimates the cost of the development will be about $150 per sf, or between $41 million and $45 million. “This is the first of a number of retail projects in line right now.”

Typically a commercial and residential developer, Pitto says Simeon recently brought on a retail expert to facilitate the company’s foray into the retail scene. The expert is Rajiv Parikh, who came to the company from Syufy Enterprises, the company that owns Century Theaters. Parikh was general counsel and head of non-theater anchored retail development for the company.

Simeon’s joint venture partner in the project is Raleigh, NC-based Cherokee Investment Partners, a real estate private equity fund that acquires environmentally impaired assets, or “brownfields,” and protects sellers from the associated risks and liabilities.

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