OAKLAND — A wobbly office market in downtown Oakland has prompted a veteran developer to ditch plans for a proposed office tower and instead sell the project site to an East Bay nonprofit.
The 11-story downtown Oakland office tower was being planned for a site at 2406 Webster Street, a prime location near Lake Merritt and on the edges of the city’s bustling and trendy Uptown district.
The high-rise would have totaled roughly 157,000 square feet, according to documents on file with Oakland city planners. That would have consisted of 147,000 square feet of office space and 10,000 square feet of ground-floor retail.
Signature Development obtained final city approval from Oakland city officials for its tower project in 2021.
The veteran real estate firm, whose projects include Brooklyn Basin, a dramatic transformation of the Oakland waterfront, had proposed the Webster Street tower project in 2019. That wound up being the year before the 2020 outbreak of the coronavirus, which unleashed unexpected economic maladies worldwide.
The lingering ailments from the virus also upended work patterns and caused companies to dramatically scale back their appetites for office space. The widespread economic shifts have made countless new office projects unfeasible.
“No new office buildings are going to get built for several years,” said Michael Ghielmetti, president of Signature Development. “Office projects are just not going to be happening.”
As a result, Signature Development decided to sell the project site, which at present is a low-rise commercial building.
East Bay Meditation Center, an Oakland-based nonprofit, bought the property for $3 million, according to documents filed on Oct. 30 with the Alameda County Recorder’s Office.
The nonprofit bought the building in an all-cash deal, the county records show.
The current economic environment has negated the need for speculative office buildings for the foreseeable future, experts say.
“It doesn’t make any sense to build new office buildings right now,” Ghielmetti said.