Downtown Oakland Office Market Boasts Lowest Vacancy Of Major U.S. Metros
It is now tougher to get an office in Downtown Oakland than parts of Manhattan and Boston. Office vacancy during the first quarter in downtown Oakland reached 5.3%, among the lowest in the country, the East Bay Times reports. Comparatively, downtown San Francisco vacancy was 5.7%. Manhattan Midtown South vacancy was 6.5%. Downtown Boston’s vacancy was 8.3% during the first quarter, according to data from Perry.
Many non-tech companies have been moving to Downtown Oakland from San Francisco to escape from rising rents, CBRE Senior Research Analyst Lexi Russell told the East Bay Times. Companies also benefit from relocating since many of their employees live in the East Bay, where rents are more affordable.
Oakland and the East Bay’s vacancy rate has trended down since Q2 2014, reaching its lowest level of 5.4% regionwide during the first quarter, according to a CBRE report. The report includes Alameda, Jack London Square in Oakland, Oakland Airport, Berkeley, Emeryville, Richmond and San Leandro.
Class-A office vacancy in downtown Oakland was even lower at 3.9%.
After a construction dry spell for much of the cycle, Oakland now has over 1M SF of Class-A office in the development pipeline. 1100 Broadway, which broke ground in January, will result in 334K SF of Class-A office where the University of California Office of the President has leased 130K SF. The 600K SF Class-A 601 City Center also is under construction, and has pre-leased 200K SF to Blue Shield.
Renovations at Uptown Station and 2150 Webster St. are expected to deliver at the end of the year, providing 382K SF and 244K SF, respectively, according to Cushman & Wakefield. TMG Partners’ 1330 Broadway was 85% leased at the start of the year.