Record-Setting Demand For East Bay Office SpaceApril 14, 2015
The vacancy rate for office space in Berkeley, Emeryville and Downtown Oakland has dropped from 11.2 percent to 8.2 percent over the past year, and the active demand for East Bay office space measures nearly 2 million square feet, enough space to add over 7,000 full-time employees and feet on the street.
According to DTZ, it’s the most demand for the market they have ever tracked. And a third of the demand is coming from firms looking to migrate to the East Bay, with firms currently located in San Francisco representing the lion’s share of those looking to make the move.
And while the average asking rent for top tier space near BART is now above $3.50 per square foot per month, up around 15 percent over the past year, rents remain substantially cheaper than in San Francisco but are nearing the point at which speculative development is starting to pencil.
Comments from Plugged-In Readers
Perhaps 1100 Broadway will finally break ground… well, if the Building Department doesn’t screw it up.
I’ve been thinking the same thing Matt. I would think a savy developer would have started construction by now so that by the time it’s complete they could take advantage of the market. I think it would be easy to fill due to its location and it’s not a big building.
And just like in 1999, when things slow down or crash, All those companies who flocked to the EB ,because of being too expensive in SF, will flock back to SF because they can now afford it. It is a vicious cycle .
Reference, please? I can’t think of any major tenants that came east during a boom and then went west during a bust. Gensler, Balfour Beatty and Future State have all relocated to Oakland from the Tri-Valley. Based on all the New York and Oregon license plates in Oakland right now -I think there’s a lot of office demand coming to Oakland from outside the Bay Area.
Wouldn’t bet that SF companies moving to Oakland will return. Especially the longer there.
Its inexorable and despite the recent spate of office construction in SF no companies are moving here. its mostly existing companies expanding their footprint in SF. And usually not by much.
Yeah, but Dave, new companies are growing in SF like crazy. Uber, Twitter, etc. And the richer push out the poorer, so Oakland is getting non-profits and association, design, architectural and engineering firms, scrappy young tech firms without big bucks (yet). It’s very promising for Oakland, and I think many of them will stay, even while acknowledging Dodo’s point that there is a push and pull.
But new companies are not coming to SF as they are to Oakland as mentioned above.
The Prop M limit kicks in shortly which will boost office rents more.
IMO the next 30years will see a big change in the Bay Area with either San Jose or Oakland emerging as the commercial hub of the region.
Oakland, if it plays its cards right, could beat out SJ for that title because its a more diversified economy and more centrally located to transportation lines.
San Jose also has the major disadvantage of not being able to build anything over ~18 stories because of the airport.
You mean downtown SJ, right? There are no such height limits on the rest of the city that isn’t under teh SJC approach path. There zoning and NIMBYs limit heights, not the airport.
Not if Oakland pulls the same crap again with its Port workers causing a huge gridlock of import/export goods. The town has a heavy union bent and some may be drawn to that. Others have looked to alternative sea transport via the expanded Panama Canal. I don’t see why Oakland refused to automate most of its loading and unloading of cargo ships much like Singapore and China.
What does this have to do with anything? We’re not talking about the Port we’re talking about office space.
I was following up on Oakland’s more diversified economy, not office space.
What happened to the Gelato of Grief, Milkshake? I was amused by it.
I got impatient waiting on G. The nerve of that guy, not scanning teh internets for a mooch’s request.
G is probably preoccupied with all the negative feedback by his agent’s “not so secret” pocket listing. He is willing to part with the white motorcycle jacket. *smirk*
Not totally accurate Dave, there are companies such as Uber and Google that have bought up huge amounts of office space in the past year, while you are correct that Oakland has been getting more new businesses that is because those with more money are buying up all of SF’s space and forcing the little guys out as Curmudgeon accurately points out.
I do agree that the business hub could shift in 30 years time depending on the metric used but SF will remain the more prestigious address for companies with income to spare, much like Manhattan to the boroughs or Jersey. SF will remain the cultural and tourist center which attracts business and it’s still geographically between SJ & Oakland and more accessible to Silicon Valley than Oakland which all puts it at an advantage to remain the center.
I wouldn’t place SF as being between SJ and Oakland. Hayward maybe.
Four words: BART to San Jose. The Milpitas station (opening late 2017) will connect to VTA light rail and make parts of Silicon Valley more easily accessible from the East Bay (currently Amtrak is the only option).
Bart won’t go directly to downtown San Jose, so that makes it less attractive.
It will. “Eventually”.
Yes, in the year 2050 or something. And there would have to be a LOT more jobs/construction in downtown San Jose to make it even remotely like San Francisco. The height limit isn’t really the issue.
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