Signature Development ditches plan for office building in Oakland

Developer sells site for $3M because project “doesn’t make any sense” in current market

Signature Development Ditches Oakland Office Project

Signature Development’s Michael Ghielmetti and 2406 Webster Street in Oakland (Getty, LoopNet)

Signature Development Group has unloaded a Downtown Oakland site approved for an 11-story office building for $3 million.

With Oakland office vacancies at an all-time high, the local developer sold the 0.2-acre lot with an 8,400-square-foot commercial building at 2406 Webster Street, the San Jose Mercury News reported. The buyer was East Bay Meditation Center, an Oakland-based nonprofit.

Signature was approved in 2021 to build the 157,000-square-foot tower near Lake Merritt, on the edge of Uptown. It was to include 10,000 square feet of ground-floor shops.

Then a dramatic shift to remote work during the pandemic emptied offices across the Bay Area, with the office vacancy rate in Oakland hitting a 29.7 percent in the third quarter, according to CBRE.

Downtown Oakland had a 33.4 percent third-quarter availability rate, up from 32.3 percent during the prior period.

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“No new office buildings are going to get built for several years,” Michael Ghielmetti, president of Signature Development, told the Mercury News. “Office projects are just not going to be happening.

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

The developer, whose projects include Brooklyn Basin on the Oakland waterfront, has teamed up with Facebook parent Meta Platforms to turn a former tech campus into a 59-acre urban retail village in Menlo Park.

The so-called Willow Village will replace the Menlo Science and Technology campus, which includes 19 low-slung offices from the 1970s. What some call “Zucktown,” in honor of Facebook founder Mark Zuckerberg, was approved late last year and expected to take years to complete.

— Dana Bartholomew