Five Reasons Oakland Is Heating Up
We asked Avison Young's new managing director Charlie Allen to give us his quick list on why Oakland is so alluring.
You probably know Charlie, but, if not, here's the skinny. He just opened the firm's new Oakland office. He started on Bastille Day (following 21 years at Cushman & Wakefield) and was lured by the excitement of doing something different. Plus, his good friend Ted Simpson left Cushman to open Avison's downtown LA office. Now onto that list...
Charlie is planting the office at Kaiser Center (above), a site he's continuing to co-list with a former colleague at Cushman. There are only a few options for Oakland buildings with full floors available. The Clorox building, for example, fits the bill. He's seen rents in top-tier buildings increase to over $40/SF. But Oakland has always been a more stable market than S.F. as far as rent swings; they never got too low or high. But as inventory tightens, they are likely to go up, he says.
The Surprise Factor
When people tour the market, they are blown away by how great a work environment it's become. (Above, Oakland Mayor Jean Quan at a Bisnow event, noting Oakland was named the No. 5 best city for attracting VC.) The problem is there's a lack of product. Any opportunity to redevelop or build is going to create that synergy. The Sears building, for example, sat vacant since the dot.com bust (two photos below). The new ownership, Lane Partners, just closed escrow.
There's a tremendous number of S.F. tenants looking in Oakland to relocate, Charlie says. It only takes a handful to start the push across the bridge. The first was from nonprofits looking for cheaper rent, then professional firms looking to improve their bottom line. Now it's across the board, with all types of industries. Companies doing well in Oakland are expanding there, too (Think: Pandora.)
Relocations & Expansions
Some companies are breaking up their requirement, inking space in S.F. and Oakland. Look at Gordon & Rees, which took a floor at 11th and Broadway and kept a big chunk in S.F. to save money. Others like minted.com expanded downtown Oakland space while retaining their S.F. location. The driving factor is BART, which keeps the two markets just 15 minutes apart, making it easy to go back and forth.
Today vs. 2004
When tenants used to consider leaving S.F. in the past, they would leapfrog Oakland and go to Walnut Creek or Pleasanton. It's a completely different market than it was 10 years ago. Residential towers are putting people on the street and creating a retail energy of restaurants, bars, cafes, galleries, and coffee shops. There's a whole street side in downtown Oakland that's completely new. Above, sfuncube's new office.