OAKLAND — A century-old highrise in Oakland has been seized by the property’s lender in a deal that provides a grim reminder of the ailments that afflict the Bay Area commercial real estate sector.
The Leamington, an 11-story landmark highrise built roughly a century ago in downtown Oakland, has been taken back by its lender due to a failed loan totaling $35.5 million, documents filed on Jan. 6 with the Alameda County Recorder’s Office show.
CIT Bank, acting through a subsidiary, wrested ownership of the property from an affiliate of Harvest Properties, which had bought the building in 2015 for $19.1 million, according to the county records.
Today, the tower consists of offices and ground-floor retail spaces at 1814 Franklin in Oakland. Originally a hotel, The Leamington opened its doors nearly a century ago and quickly became one of the downtown’s hotspots.
“The Leamington Hotel was considered an architectural masterpiece when it opened its doors to traveling business executives in 1926,” stated a post on the Local Wiki website. “The luxurious Spanish-style hotel was designed by architect W. H. Weeks.”
In 1987, the tower at the corner of Franklin Street and 19th Street in Oakland’s trendy and lively Uptown district was designated an Oakland landmark.
“Opulent social gatherings for wealthy Oakland residents were among the frequent events conducted at the Leamington,” Local Wiki stated in a web post.
Famed aviator Amelia Earhart once occupied an office in The Leamington as she planned what turned out to be her final and fatal airplane journey, according to multiple web posts.
CIT Bank took back the tower through a deed-in-lieu of foreclosure, which is a streamlined process for a lender to seize ownership of a property with a delinquent loan.
The bank’s subsidiary paid $34.5 million for the tower, which would be less than the loan amount, according to the property documents.
The Oakland office market weakened greatly at the end of 2024, beset by rising vacancy levels in the downtown district and a nosedive in city office values, Colliers, a commercial real estate firm, reported.
Well over one-fourth of the office space in the East Bay city’s urban core is empty or being offered for sublease by a tenant that doesn’t want to occupy the site, according to the new Colliers report.
In the October-through-December fourth quarter of 2024, downtown Oakland’s office vacancy rate was 26.9%. In the July-September third quarter of 2024, the vacancy level was 23.8%, Colliers estimated.
The Leamington is just the latest example of the difficulties that confront the Oakland office market.
The anticipated next step for the landmark tower is for CIT Bank to find a new owner for the highrise. Banks typically seek to keep foreclosed properties on their books for as little time as possible.