Oakland’s Uptown Slated For New Office Building By Signature Development
A new mixed-use high-rise has gotten the green light in Oakland.
Oakland’s Planning Commission approved plans for a 12-story, 161K SF office project with 11K SF of ground-floor retail on a 0.56-acre site at 2424 Webster St. on Jan. 20. Designed by Flynn Architecture and developed by Signature Development Group, the project will involve the demolition of three commercial buildings that have been home to automotive businesses, among other uses.
Economic fallout from the coronavirus pandemic has significantly dampened the once-booming Bay Area office market and likely shifted demand.
“The future of office is really unknown,” SDG Vice President, Development Elisse Douglass said at the meeting. “The future of large-scale development in our economy in a lot of ways is also unknown. We feel confident both from our experience as developers as well as what we’re seeing in the market that at some point, office development of this scale will return. When it does, however, it will be different. There will be different safety and modernization things that need to be incorporated. So a lot of work that we’ve been doing both internally with our consultants, with staff, with the public, is really making sure that this building can be adaptable for that time and whatever that future looks like.”
The project is within the city’s Broadway Valdez District Specific Plan area, according to public documents. The plan offers a framework for developing a 95.5-acre stretch along the Broadway corridor that is earmarked for about 695K SF of office, 1.1M SF of retail and 1,800 residential units to be delivered between 2014 and 2039. Much of the development has already been completed or is under construction.
Years ago, SDG completed The Hive, a mixed-use development located nearby the project in the Uptown neighborhood that Douglass said is an example of work done by the developer that reflects the community and creates an economic engine for business and retail. Douglass said SDG’s tenants in The Hive area are 94% locally owned businesses, with 50% women-owned, over 60% owned by people of color and just under 50% Black-owned. SDG is also moving forward with plans to build a hotel at 24th Street and Broadway, according to Douglass.
Two people spoke during the meeting’s public comment period expressing frustration about ongoing loud construction noise in the neighborhood, and one said, “offices are a thing of the past.”
“This is an area that under the Broadway Valdez Plan was clearly where we as the City decided to do construction of a lot of new, both offices and residences and retail,” Planning Commissioner Amanda Monchamp said at the meeting. “I do get that this area is undergoing a lot of construction, and so I understand that there’s a lot of frustration. But it is exactly what we called for and planned for in that specific plan area, and it’s now being implemented.”
The Oakland/East Bay office market year-to-date net absorption came in at 31K SF for 2020, according to data from CBRE. The firm’s Q4 2020 office report concluded that the positive net absorption was mostly due to activity in Oakland’s Central Business District, which includes the project area. Significant deals there include Square’s lease at Uptown Station as well as Credit Karma and the University of California Office of the President leasing 336K SF at a recently constructed office tower at the Key System Building. The Central Business District ended Q4 with a 9.9% vacancy rate. Asking rents in the CBD were $5.22 per SF for Q4 compared to Oakland/East Bay as a whole, which were at $4.11 per SF with 10.2% vacancy.