Oakland Office Among Top Buy Markets
Now is the time to buy office assets in Oakland. Recent data from Ten-X revealed Oakland was among the top five "buy" office markets with some of the strongest rent growth in the nation. Rents grew 7.8% last year driven by demand and a lack of supply. Rent reached $23.41/SF during Q3 2016 and Ten-X expects rent to rise 5.9% to $24.78/SF by 2020.
Ten-X Research models project a strong economy in construction and education/healthcare, which will push vacancies down further into 2018. Ten-X expects market NOI to increase 6.6% over the next two years before slowing down to 4.4% in 2019 and 2020.
Strong rental increases could help drive much-needed developments in Oakland. Little to no new office development is underway in Oakland because office rents have not been high enough to make up for the high cost of construction.