For more than half a century, the Z Hotel has welcomed visitors to Oakland just a few blocks from Jack London Square. Now Riaz Capital has new plans for the 102-key property: workforce housing.

The Oakland developer acquired the hotel, 233 Broadway, in the spring for “the value price” of $18.15 million, or about $180,000 a room, and will begin a yearlong renovation in the next few weeks.

The company will make aesthetic improvements and upgrade the property's structural and seismic performance, said Garrick Monaghan, vice president of investor relations. Improvements will cost an estimated $13 million.

Riaz plans to create 102 units for individuals making between $50,000 and $120,000 with the goal to keep rents under the $2,000 per month, Monaghan said. Leasing could begin as early as the fall of 2022.

"This building, from our perspective, is an opportunity to make the lifestyle and culture people have in Jack London Square accessible to folks who wouldn't have otherwise been able to rent in this neighborhood," he said. "We want this to be one of the best lifestyle offerings in the residential market in Oakland at this pricepoint."

The property is already zoned for residential use, Monaghan said, and is particularly well positioned for conversion into the smaller format units Riaz is known for. The hotel rooms, which will be upgraded to include kitchens, average about 320 square feet.

The company specializes in ground-up construction of units it describes as “affordable by design” — microliving studios that sit at around 325 square feet and rent for an average of about $1,700. It recently launched its second development fund focused on opportunity zones, and earlier this summer the developer purchased another property in Oakland's East Lake neighborhood, adding 200 units to its fast-expanding portfolio.

Riaz currently has 1,500 units under management and another 1,700 in development. The development fund launched in August is expected to fund the construction of another 1,600 units, Monaghan told me last month.

The seller of Z Hotel was an LLC affiliated with Sam Nassif, managing principal for the hotel, and Clyde R. Gibb, who developed the property in the 1960s. Nassif did not reply to a request for comment; Gibb could not be reached.

Gibb, a real estate developer who served on the Oakland Planning Commission in the 1970s, once operated “a chain of hotels throughout the west,” according to an Oakland Tribune article in 1963. The article describes Gibb’s plans to build the 100-room Thunderbird Lodge at the corner of Third Street and Broadway. That property would later be renamed as The Inn at Jack London Square and then as the Z Hotel. The property has historically served business travelers.

Z HOTEL

Riaz Capital has acquired Oakland's Z Hotel, which is less than a quarter mile from Jack London Square, and plans to convert its 102 rooms into workforce housing.

Sarah Klearman
Staff Reporter
San Francisco Business Times