In an ad for real estate investors in almost any asset class, this place would sound like a match: city of 435,000; sunnier weather than its neighbor, economic powerhouse San Francisco; transit options galore; newly built housing; and a cool factor that yielded the nickname “Brooklyn by the Bay.”

“If you just had to pinpoint on a map, where’s the greatest place to be in the Bay Area, you’d say Oakland,” Mark McGranahan, a principal at commercial firm Avison Young and a long-time Oakland resident, said. “Until you live in Oakland and then you go, ‘Who would want to live in Oakland?’”

Recent history shows the city taking knock after knock. Both violent and property crime began rising in 2020 and peaked in 2023 under a D.A. who had run on criminal justice reform. Three major sports teams walked away, starting with the Golden State Warriors, who went to San Francisco in 2019. The Raiders said Viva Las Vegas a year later, followed by the Athletics in 2024. Street encampments spread, even in central areas, after COVID shutdowns, leading to a homelessness rate 30 percent higher than San Francisco’s. The former mayor is facing federal corruption charges. 

“It’s so sad,” Riaz Taplin, an Oakland apartment investor since the early 1990s, said. The bulk of his 2,000-unit portfolio is in the East Bay city. “This was a government-created disaster by a group of people not thinking about what it takes to run a city and deprioritizing safety in the name of equity.” 

One investor’s misery is another’s opportunity, and a tiny crew of believers has doubled down on Oakland, sure that the city’s natural assets can overcome a bad moment — especially if they take an activist role. Colin Behring and Isaac Abid are examples of developers taking advantage of dramatic discounts on properties that price them well below replacement costs, affording them the ability to be patient while the environment stabilizes.

But that doesn’t mean sitting back and waiting for a recovery to come to them. 

“It’s too early if you want everybody else to do the work for you,” Behring said. “The easiest way to predict the future is to build it yourself.” 

His Behring Companies bought a 21-story Oakland office building with an adjacent parking garage near its newly built mixed-use apartment and co-working tower last fall for $14.4 million or just $20 per square foot for both structures. Abid broke away from his long-time San Diego-based investment firm because of how much he believes in Oakland’s recovery. He helped lead the recall of the city’s district attorney, started a neighborhood improvement group in up-and-coming Uptown Oakland and bought a prominent Uptown office tower at a massive discount.

Others may be “scarred or burned by what’s gone on, and I don’t blame them, I appreciate it,” said Abid, who lives with his family in the Montclair neighborhood in the Oakland Hills. 

But: “I wanted to get out of bed every morning and try and figure out how to invest in high-quality assets in Oakland because by doing so then I could more credibly and capably involve myself in the community.” 

The cycle

When Taplin started out in Oakland, he used to drive through the East Bay city each month to collect rents. He doesn’t recall ever worrying about his safety. 

“Maybe I was stupid, but I would drive around my Mercedes or BMW with $100,000 in cash,” he said. “It didn’t even concern me.”

In the three decades following, Taplin’s instincts seemed prescient. John Protopappas, whose company Madison Park has been investing in Oakland since 1983, picked up the well-known Oakland Tribune building downtown for $300,000 in 1995. He spent millions to renovate its interior and fill the building with tenants, then sold for over $15 million in 2016. 

That turned out to be close to the peak. Apartment rents rose 50 percent between 2012 and 2018, hitting $2,500 a month for one-bedrooms, according to Trulia figures from that year. In a first quarter 2018 report, CBRE called Oakland the tightest office market in the country, with just 5.3 percent vacancy in downtown Oakland, compared to 5.7 percent in downtown San Francisco and 6.5 percent in Manhattan Midtown South.  

“This was a government-created disaster by a group of people not thinking about what it takes to run a city and deprioritizing safety in the name of equity.” Riaz Taplin, longtime Oakland apartment investor

“I remember six years ago there were 21 cranes and now I don’t think there are any cranes up for building apartments,” Protoppapas said. 

Voters then elected a progressive city council, the beginning of the end of the upcycle, as Riaz sees it. Covid shutdowns, plus the 2023 elections of liberal mayor Sheng Thao and district attorney Pamela Price added to the changes. Both were ousted by frustrated voters in a recall last fall; Thao is also facing a federal indictment stemming from an FBI bribery probe. 

The tumult led to discounts. Oakland became one of the few Bay Area cities with one-bedroom rents below the state median of $2,054 a month, according to Zumper data. Its downtown is over 38 percent vacant, according to Avison Young data. 

Oakland values fell so fast that many developers were caught off guard in the middle of their projects. Danny Haber opened his mass timber development company oWOW in Oakland in 2017, just before the peak. His plans for an apartment project at 1510 Webster Street downtown typified the end of the last cycle by bringing a 19-story 236-unit apartment tower geared to residents attracted by all of Oakland’s best features. But by the time the Downtown building opened for leasing at the end of last year, rents were still well below the pre-pandemic peak, a fact that’s “super connected” to the half-empty offices surrounding the new apartments, Haber said. 

The problem is worse in Oakland than other cities because, like Haber, so many other developers were adding new supply between 2018 and 2023. Plus, public safety issues have led to significant tenant churn, he said. The cycle is so clearly over that Haber lopped 17 floors off of another Downtown tower he is planning at 1523 Harrison Street, turning it from a 28-story market-rate building into an 11-story, low-income tax credit-eligible mid-rise. Haber said his new goal is to build 279 units of affordable housing on the parking lot, though he’s still in the process of getting tax credit investors, which is key to moving forward. 

A market-rate apartment development in more desirable Pill Hill, across from Kaiser Permanente’s main Oakland medical center and near the upscale shops and restaurants on Piedmont Avenue, has raised equity but is having difficulty getting a construction loan, he said. 

Taplin called Oakland a “no-fly zone” for institutional investors. If he hadn’t expanded into Berkeley, Santa Cruz and San Diego a few years ago, his ability to raise capital “would be dead,” he said.

The question now for Behring, Abid, Haber and other investors is how long the no-fly zone lasts: Is Oakland a place that holds its value in the long run, despite a five-year downturn here or there, or will its decline be longer-term? 

Office sales in Oakland are averaging $60 per square foot, just 20 percent of the pre-pandemic price, according to Avison Young analyst Howard Huang. 

“That’s a pretty big discount. But of course, there’s the saying ‘Don’t catch a falling knife,’” he said. “We don’t know if the knife is done falling.” 

Big discounts and grand ambitions

Abid was a founding partner at San Diego-based HP Investors for 14 years. He walked away to start his own firm, Lakeside Group, because he believed so strongly in Oakland’s potential and the ability of its investors to enact real change, he said. 

His colleagues at HP thought it was an “unconventional decision” to focus on Oakland, he said, and he understands why, given the massive losses for those who invested at the peak of the last cycle. His buy of 180 Grand is a perfect example: he bought the distressed debt for $30 million — 82 percent off its last trade in 2017. 

The 15-story office building on Lake Merritt was Abid’s first buy as the head of his own Oakland-focused investment firm but he’s also invested in the broader Lakeside District recovery by starting NorthLake, a neighborhood improvement group within the larger Uptown business improvement district that is privately financed mainly by Lakeside and a few other nearby commercial owners.

It’s a test case to show other owners what can be accomplished with some more intensive “placemaking” that goes beyond the usual BID model, he said. It seems to be working, with Uptown now attracting more foot traffic and lower office vacancy than downtown, according to Avison Young figures.

“I wanted to get out of bed every morning and try and figure out how to invest in high-quality assets in Oakland.” Isaac Abid, founder of Oakland-based investment firm Lakeside Group

Like Abid, Behring is not a new Oakland investor but has been opportunistically adding to his holdings in the city in an attempt to create his own “ecosystem,” he said. After opening the doors to 1900 Broadway last year, he added nearby 1950 Franklin to the mix in part because it allows him to expand his sphere of influence “at a very cheap price” and without waiting seven to ten years for the next office tower to be built. 

“You had an opportunity to step in, buy something and make a dream reality in about six weeks,” he said.

Abid and Behring agreed that family offices, or very small internally controlled funds, are leading Oakland investments today because they can wait out the next five years and instead focus on a longer time horizon. Both say they are interested in buying more properties.

“Like any good developer, we’re impatient. We don’t want to wait,” Behring said when asked if the current conditions in Oakland would make him hold off on further investments. “A pause is the worst thing you can do. If you don’t like something, then do something about it.” 

Save Oakland

You can’t bring back the A’s. But there’s plenty the Oakland cheerleader-investors believe they can accomplish.

“I’ve always thought that if you put air in the tires of Oakland, it’ll do just fine,” Abid said. 

On the lighter side, that means supporting minor league baseball’s Oakland B’s and USL team the Oakland Roots. Oaklanders are “really good sports fans,” Abid said, adding that getting a new major league team would be great, but isn’t his top priority.

He and other developers are focused on the basics: trying to make sure political leaders engage with the business community to address public safety and cleanliness concerns, streamline permitting and create policies that encourage business and generate revenue. 

Politically, Abid was one of the leaders of the successful recall for the former D.A. It’s still too early to say what his relationship will be with newly elected Mayor, retired Congresswoman Barbara Lee, since she was just sworn in last month. But Abid said he’s been heartened by her engagement with the real estate and business community and ten-point plan to address the city’s ills. During the contentious election, he did not take a strong stance on her or her more moderate competitor Loren Taylor, who narrowly lost the job in an election that took days to decide. Her office did not reply to a request for comment. 

City politicians have learned a thing or two from the ousting of the last mayor and D.A., according to Behring, and know that outreach is in their best interests. 

“If you’re only talking about what can’t be done, you’re going to get replaced,” he said. “Everyone is sick of what can’t be done. That story didn’t work for anyone that was in office, and now they’re not.” 

He’s currently working with the city on a new program to make it easier for government employees, including first responders, to find housing, which he said would be a multiplier that would help recirculate tax dollars within the community. He also says his buy of 1950 Franklin from Kaiser at just $20 per square foot came partly because the health care giant liked his firm’s big-picture view on revitalizing the neighborhood with live, work, play spaces and its commitment to Oakland’s recovery. 

“Kaiser’s number one consideration is really the city of Oakland and their headquarters and their people,” he said. 

Local developers who’ve been here a while, like Protopappas, are excited by the level of engagement the newer generation is bringing to the table. Oakland has “no other alternative” but to solve its public safety issues, Protopappas said, and when it does, long-term investors like him will be rewarded once again. 

“It’s been a tough five years, but I see our buildings,”  he said. “They’re filling up.”

A lot of the investors that he’s talking to today would not invest in 2018 and 2019 because the basis was too high, and then they were scared off in the first couple of years of Covid. But now that San Francisco has begun to recover (see page 78 for The Closing with Mayor Daniel Lurie), Oakland observers have noted some increased demand. 

If Oakland’s biggest boosters can see it now, they can also see how institutional investors are going to be late to the party because they rely on past data, not forecasting. They “might be able to skip an element of risk,” Behring said, but will also miss out on rock-bottom prices. 

“We can see the future coming before anybody else because we are where it starts,” he said. 

Even those frustrated with the current state of affairs in Oakland, like McGranahan, can see “there’s plenty of opportunity.” 

“It’s just trying to get the ingredients correct and then bake the right cake. That hasn’t happened recently, but it can turn on a dime,” he said. “There’s enough of the other ingredients in place: cost, location, BART access, that if the switch is flipped, great things can happen. But you gotta flip the switch.”