Wobbly downtown Oakland office market torpedoes tower project plan

A veteran developer abandons tower plans and sells the Oakland project site to a nonprofit.

OAKLAND, Calif. — Due to a shaky office market in downtown Oakland, a veteran developer has abandoned plans for a proposed office tower and instead sold the project site to an East Bay nonprofit.

The 11-story downtown Oakland office tower was planned for 2406 Webster Street, near Lake Merritt and on the outskirts of the city’s bustling and trendy Uptown district.

According to documents on file with Oakland city planners, the high-rise would have been approximately 157,000 square feet in size. 147,000 square feet of office space and 10,000 square feet of ground-floor retail would have been included.

Signature Development received final city approval from Oakland officials for its 2021 tower project.

The Webster Street tower project was proposed in 2019 by the veteran real estate firm, whose projects include Brooklyn Basin, a dramatic transformation of the Oakland waterfront. That happened to be the year before the 2020 coronavirus outbreak, which wreaked havoc on the global economy.

The virus’s lingering effects disrupted work patterns and caused businesses to drastically reduce their appetite for office space. Numerous new office projects have been rendered unfeasible due to widespread economic shifts.

“No new office buildings will be built for several years,” said Signature Development president Michael Ghielmetti. “Office projects are just not going to be happening.”

As a result, Signature Development made the decision to sell the project site, which is currently occupied by a low-rise commercial building.

East Bay Meditation Center, an Oakland-based nonprofit, paid $3 million for the property, according to documents filed with the Alameda County Recorder’s Office on Oct. 30.

According to county records, the nonprofit paid cash for the building.

According to experts, the current economic environment has eliminated the need for speculative office buildings for the foreseeable future.

“It doesn’t make any sense to build new office buildings right now,” Mr. Ghielmetti said.