Local investors place confidence in Oakland’s recovery amid Bay Area market challenges
A distressed historic office property in downtown Oakland, California, which celebrated its centennial as a former luxury hotel, has been acquired by new ownership.
The 11-story Leamington building, located at the intersection of Franklin and 19th streets, has been purchased by local entrepreneur Ed Hemmat. The selling party was CIT Bank, which took possession of the 118,000-square-foot asset in early 2025 following Stockbridge Real Estate’s default on a $35.5 million loan obligation backed by the lender.
The $14.4 million acquisition price represents a significant decline from the property’s valuation a decade prior, when Harvest Properties purchased it for $19.1 million and subsequently financed renovation work before transferring its ownership stake to Stockbridge in 2019, based on CoStar transaction records.
However, the per-square-foot price of approximately $122 exceeded several deeply discounted office transactions completed in post-pandemic Oakland over the past year, as the San Francisco Bay Area’s second-largest city continues grappling with public safety concerns, business closures, and municipal budget constraints.
Despite these headwinds, select local investors are capitalizing on reduced valuations, wagering that Oakland’s real estate market will experience an upward trajectory in the near term, particularly given neighboring San Francisco’s resurgence driven largely by enthusiasm surrounding the artificial intelligence sector.
The Leamington Hotel, its original designation, commenced operations in 1926 during a previous period of economic expansion and confidence, when Oakland flourished as a 20th-century industrial hub propelled by railroad infrastructure and shipbuilding industries. The Spanish-architectural-style hotel, designed by celebrated architect W.H. Weeks, required over $2 million in construction costs—a substantial investment for that era—and accommodated notable guests including aviation pioneer Amelia Earhart and religious figure Aimee Semple McPherson during its early operational years.
Pattern of Discounted Transactions
The Leamington experienced a brief resurgence during the 1960s as a rock music performance venue, hosting renowned acts including The Grateful Dead. Following a bankruptcy closure in 1981, the structure underwent conversion to office and retail space two years later through a collaborative effort between municipal authorities and a local development firm.
Improvements executed approximately ten years ago encompassed restoration of the elaborate terra cotta facade and Beaux Arts architectural elements, along with comprehensive interior modernization featuring contemporary office infrastructure including natural lighting installations and bicycle storage facilities. The building’s location places it within walking distance of Oakland’s Paramount and Fox theater venues and Lake Merritt, with approximately ten minutes’ commuting time to downtown San Francisco via public transportation.
These advantageous characteristics have undoubtedly attracted investors securing opportunities on office properties that, in certain instances, commanded substantially higher valuations just several years ago.
In late 2024, a distressed 15-story office tower at 180 Grand Avenue in Oakland, which had traded for $175 million five years earlier, was acquired by San Francisco-based Lakeside Group and Rubicon Point Partners for approximately $30 million. Kaiser Permanente, among Oakland’s largest employment providers, sold 1950 Franklin Street—a predominantly vacant 21-story structure overlooking Lake Merritt that previously served as the healthcare organization’s executive headquarters—along with an adjacent parking structure, to Behring Cos. for roughly $14.4 million, equating to approximately $20 per square foot.
