Uber has purchased the 400,000-square-foot Sears Building in Oakland’s Uptown neighborhood which the department store had occupied since 1996 and vacated last year.
Built for the H. C. Capwell Company in 1929, 1945 Broadway was acquired by Lane Partners for $24.2 million in late 2014 and is in the midst of a $40 million renovation and re-branding as “Uptown Station.”
The renovation, which will include a market hall for restaurants, ground floor space for retailers, and an underground parking garage, is slated to be finished in early 2017 and will yield workspace for up to 3,000 Uber employees.
Uber’s purchase price was not disclosed and Lane Partners will remain involved in the renovation.
UPDATE (9/24): Uber Paid $123.5 Million For Uptown Oakland HQ.
Booya! Take that, Oakland haters. Now watch the line on the rents & sale prices graphs continue to go up.
Is that a good thing? I would think having a diverse group of businesses in that location (rather than one whose business model is being actively challenged in court) would be a better sign.
I would say the vote of confidence of having one company take the entire building is a huge short term win. Whether Uber ends up using the whole building is almost immaterial at this point. Who knows where they will be in 2 years?
Just because their business model is being challenged doesn’t mean they won’t be very successful. Maybe less profitable, but they are insanely profitable now and could survive a switch in their model. Let’s keep in mind that PayPal also had to go through years of litigation. Uber does $300m in revenue in San Francisco alone. It is on track for $1b in revenue. I don’t think it will just disappear.
Insanely profitable?
“Uber Technologies Inc. is telling prospective investors that it generates $470 million in operating losses on $415 million in revenue, according to a document provided to prospective investors.”
Damn right!! I won’t be using Lyft again.
I hated my Oakland investment just a little less this morning.
Downtown Oakland seems primed and ready for more development, both commercial and residential.
Oof. Got a long way to go, though. The vacancy rate on retail storefronts is astonishing.
3,000 well paid techies will go a long way. Just look at what happened to the area around Twitter in SF. This will almost double the number of tech employees in Oakland. Combine that with the growing number of techies who live in Oakland and work in SF. This is just the beginning. Haters gonna hate.
Still plenty of yammering lost souls on Market Street. Once the venture capital dries up, Market Street will return to being Market Street.
I hope it helps. I love Oakland-it has a beautiful urban fabric in places, and this is a lovely (and significant) building.
still the highest violent crime rate in california. even uber drivers should easily pass a background check compared to average populace.
Geez, stop the hate. Got nothing nothing nice to say…well keep your negativity to yourself 😉
This is great news, hopefully it leads to more development in both cities to keep the rents in SF from suffocating the economy.
SO HUGE!
Hopefully Twitter is to SF’s dilapidated section of downtown as Uber is to Oakland’s dilapidated downtown
The area is not dilapidated. Several great places to eat, drink and listen to music, indoors and out, within a 2 block radius. My friend lives in a 1 bedroom one block away and his rent just increased to $2,600.
BTW, I was wondering why active renovation activities seemed to have slowed/stopped a week or so back when I walked by the building. This explains it….
3000 employees. Sounds like the bulk of Uber’s workforce will be in Oakland. Great news as Oakland emerges as the core business center of the Bay Area. This is one of the first steps.
I assume the SF Uber building will have mostly the higher ups and marketing and not near the employees this site will have.
No it will be about 25% of the projected total. (SFGate has a similar story, once you get past the obligatory “half-empty” remark that a building under renovation is somehow “moribund”.)
Well that’s a wrong assumption as usual Dave.
Uber will have more than 3k employees in SF. Oakland is on the rise, but SF is still significantly ahead in terms of publicly held companies that have HQs in the city.
Uber also opened an office in Kansas City, are you going to declare that Kansas City has a bigger economy than SF now?
We don’t need Oakland to be better than Oakland. We just need it to be closer to the Oakland of the early 1940s.
“Great news as Oakland emerges as the core business center of the Bay Area” that’s a little much
oakland-bashers only bash because they are jealous of affordable rents. but once uber and the inevitable tag-along firms move in, then the rents will go up and people will shift to bashing san leandro instead.
oh, and richmond of course also.
Never forget Vallejo. Good old reliable disappointment.
Vallejo had its heart broken and spirit crushed when the Navy shut down Mare Island Naval Base. Been a brown dwarf star ever since. Perfect landing pad for the upcoming wave of Oakland criminal expats.
This is an interesting development coming on the heels of Uber’s announcement of their worldwide headquarters breaking ground in Mission Bay come January…
Yes. And also Uber announcing SF and Oakland are the headquarters.
The shift to Oakland (its building will house as many employees as the SF building) is perhaps a recognition of where the future lies in terms of office center of the Bay area. Uber laying a stake.
Plus many of their employees live in the east Bay and there may be pressure to have those jobs in the East Bay too. Given Oakland is the Bay Area transportation hub and provides much easier access to less expensive housing than SF.
There will be a large increase in Uber’s Bay Area workforce and note the additional employees are not being put in SF.
If Salesforce is sold don’t be surprised to see the new owners move large chunks of employees to the East bay and perhaps out of state.
Totally inaccurate– the new Mission Bay Global headquarters is larger than the Sears Building, and Uber also has 3 other SF office locations along Market Street.
I have doubts on Oakland since Caltrain only goes to SF.
Oakland has this other train, called BART.
If downtown Oakland becomes a business center it will send people looking for housing all through the East Bay. There are tens of thousands of ripe, ready and still CHEAP SFR’s down in DEO (deep east oakland), south of High Street.
Of course it’s still *gangster land* there for now but with housing pressures like these that may not last too much longer. Yay.
Fruitvale is already “much improved” compared this time last year.
@Some Guy–Is *gangster land* code for non-white? And does “much improved” mean *more white people*? Please clarify.
Geez DH,
“Gangster land” as in standing on the corner, or sleeping in your bed, and getting shot.
Why are you making it a racial thing anyway?
Everyone wants to live in safe neighborhoods
“Gangster” (or “gangsta”) has a very well known racial connotation. And if nothing racial was meant by the comment that Fruitvale is “much improved”, I am truly interested to know what was intended. Somehow you *know* that the OP’s comment meant something other than what is stated. The OP’s third paragraph clearly predicts that rising home prices will force out the current [primarily black] residents and things will become safer.
I really don’t appreciate having the “racial thing” redirected back at me when the original comment had a not-too-subtle subtext. As Stephen Colbert’s character would say: “I don’t see black”.
Most people want to live in safe neighborhoods, including about 99.99% of the current residents of Oakland. Crime is typically a symptom of poverty but I don’t see many people here suggesting ways to ameliorate poverty. It’s so much easier to remove them from the community and let wealthier people move in. I guess it’s their own damn fault for being too poor to own their home.
I suppose people priced out of Oakland can move to Concord or Antioch…until the people with money decide to “gentrify” and kick them out of there too.
much improved simply means that it’s easier to sleep at night because there are fewer assholes making noise at 3 o’clock in the morning. If you want to read a racial subtext into that that’s your business.
Don’t forget dumping trash on the side of the streets and tagging everywhere. Yeah…that’s gangster land. My neighbors are are highly educated professional african americans. They aren’t gangster. They are what we call “great neighbors.”
Its about the behavior. Not the color.
No, it’s not code for anything other than the fact that a great number of people get shot there in broad daylight.
Hahah, Uber is opening in Oakland not because they’re trying to attract employees to commute from Silicon Valley. SF employees to can commute via BART right to work door step in under 20 minutes. 1/5th of their employees already live in the East Bay, and they expect that number to grow.
This is amazing for Oakland. Definitely good things happening in that town.
Looking at the rendering, however, I wonder why they are stripping away the old facade? It had a nice classical revival and Beaux Arts look to it.
the facade was a hastily-executed seismic retrofit from a quarter century ago that left Oakland’s last major department store awash in stucco and devoid of natural light. the original facade is much cleaner and has many more windows.
I wondered the same thing and did some googling. Whatever was there in 1929 (which itself wasn’t as “pretty” as the 1912 version but still interesting) appears to have disappeared a long time ago.
Yes, repairs to the building after the 1989 earthquake were sufficiently high to require seismic upgrading, and CHH opted for shotcreted external shear walls instead of internal bracing (the time period required for the former was less and the work was completed in 7-8 mos). The current work will install X-bracing around an atrium, cut windows through the shotcrete – though it will still remain in place – and cover it with a ceramic veneer “rain screen”.
The latest version – which is correctly shown above – is more sensitive to the original design than Lane’s earlier proposal(s) which would have replaced the chamfered (brick) corner walls with glass and enlarged the entrances into the second story. Sadly, the interior first floor, which had survived largely unchanged from 1929, has been removed.
The 1912 building, was @ 14th/Clay, and was demolished in 1958.
Expanding on SutroTowers comment about this being an interesting development it is, IMO, another sign of the shaky nature of SF being a business center going forward.
Uber expanding outside the City though founded here.
Schwab moving a huge amount of workers recently to Texas from SF – and leaving One Fremont with uber empty space.
Lennar having trouble signing tech companies, large employee base, to their HP project. Instead Lennar HP’s office space may be largely leased to educational institutions.
SF net office absorption being anemic recently. Despite the boom.
No new companies coming to SF. Nothing significant. Sure I-Stripe is leasing all of a new SOMA building and I think Pinterest is too but these are companies already in SF just shifting location for newer digs.
All the for lease signs in the old financial district. And probably long waits to lease the space I-Stripe and Pinterest building once they vacate.
The cost of everything is hurting SF and if a major number of office buildings are built in Oakland you are likely to see big shifts of workers from SF to Oakland. Further aggravating the slumping fortunes of SF.
The gridlock as many here bemoan is exasperating the problem. Gridlock that is no where near as bad in Oakland.
SF’s infrastructure can’t support big increases in workers or residents. The PC can approve all the condos, million dollar, it wants but that will further cause the City to down spiral. Especially when workers in SF mostly can’t afford these places and face long commutes. That gets old quickly and if jobs and office space become plentiful in Oakland the workforce of many SF companies will increasingly influence decisions of those companies still in SF as to where to expand to.
Dave, you have one note in your repertoire and it’s flat. Can’t we just celebrate Oakland without dissing SF? And as many have pointed out this is NOT Uber HQ (which will remain in SF) and it will only be a portion of the workers they expect to employ in 2017 when this project is actually occupied.
Of course SF could have supported a large city-within-a-city in SOMA to Bayview, but we squandered that golden opportunity and the whole city is paying the price.
Dave, San Francisco will be just fine; and I welcome further development of Oakland as a benefit to the Bay area.
Yes, housing within the City will continue to get more expensive in direct relation to how much desire people have to live here. Over the next fifty years, San Francisco will become wealthier and lower paid workers will live in the collar communities and commute, just like Manhattan, London, Tokyo, to name a few cities with similar high cost housing.
Any temporary “Mission Moratorium” issues will simply be a footnote in history and be resolved by the free market with people making their own choices in the plus and minus column of what their priorities are in life.
The Mission moratorium is short sighted.
IMO a more proper initiative would have been a requirement, city-wide, that all new major residential projects be 40% affordable. It can be done and the developer can still make a bundle. it is being done – just got a flyer for Mission Rock and the Giants are touting it will be 40% BMR.
That development is also on leased land and is at a scale that is simply put, enormous (multi-phased with optionality to ride out various cycles in different ways as beneficial to the bottom line) enough for them to more easily increase the % affordable.
Also, not all “affordable” housing is the same. I can tell you that it’s not 40% affordable to people making 10-20% of the AMI (area median income). There is a lot of fine print.
Finally, it’s all about the kind of money backing a project. Profits and returns are generally *not* that high in SF, but they are safe (especially because of all the insane laws and regulations making it difficult to have a lot of competing projects at any given time…major part of the reason we are seeing an office and housing shortage now). Equity behind many SF deals are looking for longer, safer bets, and are willing to sacrifice some profits or “yield/IRR” as a result.
Conversely, equity chasing deals in Oakland or in other markets such as Cleveland will have a much higher cost of capital because these markets are seen as more risky. In all actuality, Oakland is a very blurred line. It’s basically like San Francisco in terms of regulation and development costs without the same kind of demand or achievable rents. That actually makes it in many ways more difficult to invest in than a Cleveland.
I digress…your comment scares me and is indicative of why NONE OF THIS STUFF SHOULD GO TO BALLOT. WE DO NOT KNOW MORE ABOUT REAL ESTATE FINANCE/CAPITAL MARKETS/DEVELOPMENT/OR THE INS AND OUTS OF SF POLITICS/REAL ESTATE REGULATIONS THAN THE PLANNING COMMISSION OR DEVELOPERS THEMSELVES. And despite what people want to claim, Mission Rock is a supplementary investment and hedge for the many many owners of the Giants, not a massive and immediate profit driver. It’s going to be held as a non-liquid investment, and held for a while, generating annual distributions from cash flows and occasional cap gains from one-off sales of pieces of the development, when all is said and done after many years, perhaps decades, of building it, through multiple up and down cycles.
Developers of other buildings going up in SF are generally salaried employees of larger firms, such as REITs, and they personally might see a pop in their bonus for successful development, but it’s not like these local teams working for larger firms will personally benefit or profit from individual developments like people think they will.
So frustrating, real estate and this city. Everyone who is NOT a real estate developer/real estate finance person thinks they actually know how it all works. Some people even believe that constructing buildings, owning them, leasing them out, etc should be NON-PROFIT! WTF
The quicker we can take singular decisions about developing this city out of the hands of a dumbass civilian population with crazy insane agendas and absurd misinformation and leave it in the hands of elected and appointed (through elected) officials, the better.
On a personal note, yes, I think more affordable housing would be great. But thanks to progressives in this city and state, building it is not that simple. Ironically, we do have progressives to blame for lack of affordable housing, as well as insane general housing costs.
Housing shortage yes. office shortage – that is a canard IMO. The absorption rate net has been low. Lots of for lease signs in the financial district. No new major employee shifts to SF. The Lennar HP situation.
BTW, this is why I support a 10 year moratorium on new office construction in SF. Which would be practically 5 years as the M cap has been allocated to favored political developers – like Lennar – and is full for 5 years or so now.
Dave, perhaps you haven’t noticed that SF’s employment numbers are at record highs? SF doesn’t need companies to move employees here, because the companies already here are growing.
And for the fortieth time, the health of the office market should be measured by both vacancy rates and leasing rates. As leasing rates surge you often see a tick up in vacancy rates, since it pays landlords to hold out for better tenants. I’d love to be wrong though and see SF leasing prices begin to fall.
Manhattan, London, and Tokyo have taken their development opportunities provided by changing use and created new and DENSE neighborhoods to accommodate growth.
Can only speak to NYC and the huge difference is the transit infrastructure in place there. Many, most?, New Yorkers don’t own a car. It is a huge cultural difference between SF and NYC on car ownership.
Denser neighborhoods should only come after, or as, appropriate transportation modalities are put into place to support the density.
Gridlock now SOMA during commute times. One of the arguments for the reverse flow “bridge” needed by East Bay buses, and which Hines is refusing to accommodate, is the gridlock without it, and concomitant improvement, will hurt business in SF.
The transportation issue is the biggest reason the Warriors arena proposal is untenable.
Increased density w/o any means to handle it is a recipe for disaster.
Agreed. But BART is not 24 hour and isn’t really even all that late night. That alone severely hurts Oakland’s chances at becoming the hot spot for young professionals that Brooklyn has become for New York, and conversely, that will slow and make it difficult for companies to bite the bullet to locate major offices in Oakland, knowing that recruitment will be more difficult there.
Transit in the Bay Area is abominable.
Take the Van Ness BRT. Much needed, and everyone acknowledges that. But now you have a bunch of middle-aged burnouts living on or near the corridor complaining that some scrappy little trees currently in the Van Ness median will be removed to make way for the improvement. Their complaints will surely delay progress even more. Are the trees all that pretty, endangered, or useful as they are? NO!
The other thing? That 1-1.5 mile BRT will cost close to $1Bn. For buses. We used to be able to build massive subways around entire cities for less than that in today’s dollars. It’s already been a decade of planning and designing this thing, and still nothing. Remember, we’re talking glorified buses here. The same corridor where it took a hospital a full decade and nearly $800M in “community payouts and palm greasing” only to have their plans chopped in half simultaneously before they could even begin construction on their new hospital (which was actually a requirement given updates to CA seismic code…so we almost lost a whole hospital in our growing city as a result of NIMBYism and extreme entitlement).
SF is a hyper-difficult (politics/regulations/corruption) and expensive place to get anything done. Most of our cities in America are this way now. As other cities (like Atlanta, Houston, Phoenix, etc) grow up, the fact that they weren’t big and important during a time when all of this infrastructure could be built and proper urban zoning (or positively lack thereof…Nob Hill would be illegal today) was still around, will make it difficult for them to sustain their growth.
Oh the frustrations.
warriors arena is a done deal. they’re not staying in Oakland. The As and Raiders are not far behind either
@ Dave’s latest reply about wanting an office construction moratorium (WTF…more moratoriums?!?) and insinuation that SF’s very very recent slowdown in net absorption has to do with lack of demand…
You are being ridiculous. Net absorption has slowed most likely for a few reasons:
1) The available blocks of space aren’t what the market is looking for (largely driven by a lack of options, which in turn is driven by historically low new construction)
2) Insane rents…new construction *today* is approaching $100 net and well well well over $100 full service. Only high growth tech firms flush with new series funding can afford these rents or justify them, in this market. Very few can or are willing to afford such triple-digit rents even in Manhattan.
Why are the rents so high? Because the vacancy is sooooooo low and demand is absolutely off the wall right now. All of this is relatable to my #1 above.
What would solve this problem is a little more free market approach to developing office so that we aren’t cramming a bunch of projects in every 30 years or so on the cusp of potential slowdowns. Steady development without ridiculous development office caps and over-regulation increasing (unnecessarily) the cost of every development would do this market well.
Your idea to introduce a moratorium on new office construction (especially now at the peak of this cycle) is every bit as ridiculous as the people in the Mission demanding a housing moratorium in their *hot* in demand neighborhood at the height of this housing/economic cycle.
And SF politics allows you to have such a say even though you are as far from an expert on this subject matter as humanly possible. Congratulations for being able to actually force your collectively malignant opinion on so many people, overriding market forces, and wreaking even more havoc on the disaster that is SF housing/office crunch. Don’t forget we are where we are across all sectors of real estate thanks to decades of this sort of idea that we should limit growth that much. There is a finer line to walk that limits growth but doesn’t enforce punitive damages on residents or companies and thus their employees. Your solution and the fact that you, an ill-informed citizen, can help to enforce it, is what’s wrong with this city.
OMG, the sky is falling on SF because one fraction of a SF-based company is moving into a downtown Oakland space.
Remember, Clorox left downtown Oakland for many reasons, crime being one. I knew employees who worked there who said the company had security personnel escort employees to and from the BART station in the early morning/late night.
Delicate flowers commuting from Contra Costa County. Uber’s employees, coming from mid-Market, are made of heartier stuff.
Mark, This is big news for Oakland. I’m not sure why someone would use it to dig into SF. I personally think we need to work as a region instead of separate cities to provide adequate housing and jobs.
I believe shuttles and security are mainstays for many big companies in both cities. BTW, there is a door from BART into The Uptown complex so if anyone is really that afraid of 20th and Broadway then they do not need to go outside. Like the door into the SF mall.
You should come over to Oakland. If you like Beer there are loads of gardens around and you can enjoy sunnier weather. I know many also opened in SF. I hope to check them out too!
I’m not disagreeing. My initial statement was in response to all those comments about the foreseeable doom of SF.
I like Oakland and it has a lot to offer. I lived at Lake Merrit back in 2000 when I first moved here. Downtown after 5pm was a wasteland. I was at 20th/Bway a few months ago on a Saturday afternoon to pop into the 24H Fitness. A ghosttown. However, I definitely can see the potential and hope that an influx of commercial and residential projects will create a 24/7 place to be. Once BART is extended to SJ you’ll see a big change in the East Bay from Oakland to the south bay. Meanwhile, in SF, the Caltrain extension will be collecting more dust.
Got it!
Yes, that particular block near the 24 hr is usually pretty desolate. Sometimes the streets do seem so empty but then you go into the restaurants or bars and they are packed. I haven’t been able to figure that out yet! That being said, there is much more activity then there was 7 years ago. Something like 200 bars and restaurants have opened in the past few years. It is much different between 2007 when I moved here and 2015.Spend some more time if you can/want to. It’s all good.
Breaking news…..Uber buys building in Oakland, SF to become Detroit in 5 years time!
This is a good win for Oakland and should only improve the city. But just because the ugly step sister found a date to the ball doesn’t make her the home coming queen.
SF is world class destination and probably #2 only behind NYC in the US. Oakland isn’t in the top 15 in the US
I didn’t realize we had the author of The Best Places to Live on this site. Yeah, SF is a real world class destination: crime, filth, extensive homeless problem, crumbling infrastructure, 3rd world transit. You’re right, though. It is #2.
oakland isnt in the top 150, forget about 15
Doomsday? Not quite On a scale from 1-10, its a 1 or 2
Remember the late 90’s? BofA and its off-spring, Visa and Schwab all picked up and left.for NC & AZ. Then went Chevron to San Ramon & Houston.
The Bay Area has a ton of world class companies that aren’t headquartered in SF. If Oakland becomes another Sunnyvale or Palo Alto or Santa Clara or even Fremont, that doesn’t hurt SF one bit and it actually contributes to the gestalt of the entire area. Brooklyn’s rise hasn’t hurt Manhattan – same thing.
SF is still very desirable and if companies move to Oakland, prices here will fall a bit and new companies will prefer to start here again. That’s normal.
More interestingly, I can take BART and be in downtown Oakland in less time than I can take the T to the Dogpatch. As companies move to Oakland, a second BART tube becomes increasingly important.
I completely agree that if more HQs were scattered around the Bay Area that would relieve some congestion and/or provide the impetus to improve mass transit.
As for Brooklyn, the reason people and businesses moved there is because they were priced out of Manhattan starting in the mid 90s after the city was re-gentrified (aka, cleaned up). This is starting to happen in Oakland, too as SF becomes more unaffordable. Even in SF, it would be great to see development spread out within the city. Geary could become an attractive business corridor (a smaller-scale Wilshire Blvd) but instead it’s locked in 50s sentiment and the usual progressive politics.
In the words of an East Bay booster: “We’re number two, we’re number two!” (queue the Dione Warwick… I mean MC Hammer).
These small wins for Oakland do matter but it is long overdue given the existing infrastructure; however there is still a long way to go. For instance, it is crazy that a city of that size virtually has zero retail. Nonetheless prime neighborhoods in Oakland like Rockridge & Crocker Highlands are still selling for less in some cases than Bayview. I know where I’d be looking if I was in the market.
Oh, someone did mention race earlier, and for better or worse Oakland is increasingly becoming more white just like San Francisco over the past 20 years. It’s a fact. Check the neighborhood demographics.
Even Oakland retailing is slowly getting better in downtown…but more from a grassroots up model. Lots of small local stores that are slowly turning around perceptions of the “retail wasteland” (plus a ton of bars and restaurants). My own feeling is that will lead to a gradual incursion of more “credit worthy” tenants throughout downtown. The ground floor of the Uber building will be a good place to test that presumption. Given SF, Emeryville and Walnut Creek though Oakland has basically given up the opportunity for most big players, and the sooner City leadership gives up on this top down model of economic development, the better. They’ve wasted big bucks over the years on trying to attract department stores and the like.
Oakland doesn’t need huge box stores. Emeryville can have them. What we need is more smaller retailers, hotels, housing towers, office towers and eventually a Westfield type of shopping mall. These will come when more companies move downtown, I guarantee it. Give it 10 years and downtown will be transformed.
SF has technically become less white as a percent. With the exception of blacks, all major “races” have increased in population across the city. But both whites and blacks have seen declines in percentage while Asians have seen substantial gains, as have Hispanics (I guess they aren’t necessarily moving to the Mission, but Hispanic population is growing in the city).
But let’s not let facts get in the way of a good politicized story-line!
And Oakland is about the most diverse city in the country with ~one quarter of the population going to each major race: whites, blacks, Asians, and Hispanics. Few cities of any size can claim anywhere close to that.
Immigration to the Bay Area from Latin America and Asia are very strong, and not every single tech worker or other domestic migrant to the area is single, caucasian, and male.
If we build enough housing and centralize office convenient to transit, then both SF and Oakland can retain more diversity than if we choose not to build enough housing or improve transit, thus forcing people to East Palo Alto, Pleasonton, Vallejo, and beyond.
Pleasanton is ultra-white bread and expensive. Shouldn’t be mentioned in the same sentence as East Palo Alto or (even) Vallejo).
Fair enough. Not sure I agree with everything, particularly with respect to the white population in SF over the last 5 years. That said, my greater point is that the black population in the city and Oakland has declined significantly over many years so in that respect both cities are ‘more white’.
The census is pretty clear with the yearly ACS – whites continue to decrease in SF as a percentage. Blacks are also decreasing (at a higher rate), and Asians and Hispanics are both increasing rapidly. This is a 50 year trend that has shown no sign of changing, ESPECIALLY over the last five years.
3 headquarters, including one built to order and another renovated? That’s a lot of HQ building curse. I’ll bet uber never moves into the dogpatch building.
To make Oakland a good office market, Caltrain needs to be connected to BART. Hope Oakland will work with SF to make this happen.
You vastly overstate the importance of Caltrain. Caltrain has average daily ridership of 58K, BART has 425K. Connecting BART to Caltrain is a worthy goal, but it will do nothing for the Oakland office market.
Dave, most of the commuters that travel anywhere in Oakland are merely passing through on their way to jobs in SF and other cities. No amount of intersecting freeways can make it a hub, anymore than Jersey City and the Bronx are the transportation hubs of NYC, even though they have the greatest concentrations of freeway interchanges. They are all crossroads of sorts, but mostly the sort where people only stop when traffic backups force them to stop. May as well call Oakland the transportation bottleneck of the Bay Area.
As for Oakland “provides much easier access to less expensive housing than SF.” Well, the extra 10-15 minutes it takes on BART to get from downtown Oakland to SF limits whatever benefit that has. FTR, the #1 through #4 destination stations for BART riders that board in Concord are the four BART stations on Market St in SF. The same for BART passengers that board in Fremont, and Dublin, and Berkeley. And the same for the 19th St station next to this location. Even downtown Oakland functions as a suburb of SF.
At least Uber’s first Bay Area suburban office location is in Oakland, not Pleasanton or Concord, which are even closer to less expensive housing than Oakland. Good for Oakland and better for SF than if it had been Concord or Sacramento.
With commercial rents so much lower than SF CBD, an abundance of underdeveloped land and underutilized transit, there should be much more of this. A smart and large company might want to have offices within a block of BART in both the SF and Oakland CBD. Only takes ~30 minutes to get door to door for a meeting and 10Gbps links enable the bitwise sharing economy.
Though why is it better to use expensive investor money to buy RE instead of using it to grow the top line? I would have though if Uber’s investors wanted to buy RE they would without encumbering it with the risks of Uber.
I ask again, what smart and large companies are locating staff in SF? It is not happening. Absorption rate has been dismal. Its all a shuffle from old building to new ones within SF.
Forget Oakland, Seattle and Portland offer more to large employers than SF. One gets the climate, more rain but still, less expensive housing and great street life. Actually better than SF – have you been to downtown Portland or Seattle? If not, check it out.
There is no reason for any company desiring to move a large workforce to the Bay Area to choose SF. Moreso going forward if Oakland gets a few large office projects.
I’ve mentioned before that SSF is doing fine with its offices at Oyster Point but minutes north Lennar is struggling to lease space/get interest in its 2 million or so of proposed office space.
I think these are red flags for SF. Yeah, there will always be the views and the bridge and the restaurants but there is the possibility it becomes the “tourist” destination of the Bay Area 50 years from now while SJ, Oakland become the meat and potatoes to SF’s dessert.
Just saying.
Dave, I can’t respect your uneducated opinion on the office market in SF. The total available rate, including sublease space and space “coming on the market (potentially)” is ~9%. In the best submarkets in SF with the best transit access and best optionality, the vacancy is well below 5%. Heck the all-in “potentially available” space in submarkets like SOMA and Mid-Market are ~3%. Vacancy is ~1-2%. That’s absolutely ridiculous.
WHAT IS THERE TO ABSORB??? New construction is easily justified by two criteria:
Direct Vacancy <10% [SF = mega check…one of the tightest markets on record, ever, right now…probably the tightest large market in the country right now]
Rents of a certain threshold for the market: [SF = mega check…way exceed what's necessary to justify new construction given the cost of capital of the equity market that looks at SF]
Basically, historically there has not been enough construction. Markets have slipped but the over-regulation and general costs have remained high, even in off times. Now times are booming. Nobody has anywhere to go!
And the only companies that can afford new construction rents today are high growth tech firms flush with cash from recent valuations.
The lack of steady new construction in the city, coupled with over-regulation and constant uncertainty over the potential results of crazy typical SF progressive politics, has lead us to where we are today. It's actually a wonder the Bay Area economy is as good as it is, but we have the infrastructure around from previous generations that you just can't replicate anymore, so thank you forefathers. No thanks to politicians of today, or how progressive politics has impacted local real estate for the past ~2-3 generations.
Your thoughts and the fact that you can help to enforce them through the ballot box are tremendously scary and negatively impactful for us all, yourself included. If developers want to overbuild and bankrupt or financially harm themselves, so long as they build quality buildings that improve neighborhoods, that can only help you and me. When you and me don't allow developers to build at all, thinking that's good for ourselves that they can't even build and God help us, profit, potentially, then actually that translates into brutal rents that we must pay and diminished potential economy for us all, and for anyone else who may want to move here (omg people wanting to move here from abroad or elsewhere in the US, no, we can't have that!).
” If developers want to overbuild and bankrupt or financially harm themselves, so long as they build quality buildings that improve neighborhoods, that can only help you and me”
Didn’t we try that before 1929 (and don’t they still do that in Houston)?? IIRC there wasn’t a major buildling built in Downtown SF between 1930 (the Mills, Pacific Bank, and Shell Buildings) and 1955 (Equitable Bldg).
@Dave: You said: “what smart and large companies are locating staff in SF?”
For starters: Uber, Salesforce, Airbnb, Stripe, Fitbit, Orrick, and Lending Club.
Your theory is 100% logical, except that it is not shared by major tenants, investors, and developers.
Just saying.
Jake, 12th Street is the 5th busiest, and 19th is the 9th busiest station in the BART system. Oakland is clearly the hub of the BART transportation system, and has incredible transportation links throughout the Bay Area. It’s actually not at all analogous to Jersey City. Regardless of current use (and yes, the majority of BART riders are going through Oakland rather than getting off), the location at the center of regional transit is an incredibly promising factor, particularly in the context of an improving city.
Oakland is the transportation hub of the Bay Area. Once BART extends to San Jose, Oakland will be closer to the Silicon Valley, timewise, than SF.
Oakland has the land, the higher height limits, the hills, the Bay front.
This is inevitable – that Oakland 50 years from now or whatever becomes wht Manhatten is to NYC.
There were rumors that hi-tech companies were scouting Oakland office space a while ago. Once Goodle or Apple sets up a secondary headquarters in Oakland it will be over. Though it will take decades to play out.
Meanwhile SF will convert downtown streets to partial bike lanes and such and accelerate the exodus/lack of interest in the City as a serious business center.
Higher height limits? Where?
“This is inevitable – that Oakland 50 years from now or whatever becomes wht Manhatten is to NYC.”
Oakland is not even brooklyn to SF. Oakland is the Bronx. People live in the Bay area all their lives and don’t visit Oakland. Its just not important or interesting to most people, when there is so much in the Bay area. If Oakland were next to Birmingham, AL, it might be a closer 2nd city.
Tru that. It’s the Bronx, but it could turn into Brooklyn if housing pressure stays high enough, long enough.
Your (baby boomer) experiences are not universal FYI.
mid gen Xer
curmudgeon, both BART stations in the Mission have almost as many riders as the 12th St station in downtown Oakland. FWIW, the aggregate ridership of all 7 Oakland BART stations is less than the BART stations west of civic center (16th to SFO).
Two-thirds of all BART trips either begin or end on Market St. And for good reason. That’s where people need to get to/from when the alternatives (mostly roadways) are the most congested. SF has 3-4 times as many jobs as Oakland and they are much more concentrated near BART along Market than anywhere else in the Bay Area. Those Market St stations have seen 30-40% ridership growth in the past 10 years.
BART isn’t much of a classic hub-and-spoke system because relatively few people need to change trains at some hub to get where they are going. Many of them pass through Oakland because it is next to the bay tube. Don’t confuse the physical topology of the network with the actual use. A lot of airplanes fly over Kansas. There’s more street pavement in the Sunset, but more vehicle miles driven in SoMa. A huge amount of US-Asia IP packets pass though Moro Bay. More BART stations in Oakland, far more boardings in SF.
Besides, Dave’s claim was “Oakland is the Bay Area transportation hub”, not the BART hub. That’s why I mentioned Jersey City, though I meant Newark, which has a similar mix to Oakland of major highway interchange, airport, port, train…
Oakland is the hub for containerized shipping for the Bay area. But otherwise, the Bay Area doesn’t have or need anything like a hub for non-freight transportation, except for maybe SFO for international air. The Bay Area has two CBDs: SF and the valley, not one like almost every other metro in the USA. SF CBD is at the center of a multi-modal transport network (train, car, bus, ferry, walk, bike) that moves a half million people in and out every business day. The valley is almost exclusively a drive alone private car on public road network.
Dave, you’re just saying more of the same silly, unsupported, speculation as you’ve posted on here before about the futures of Oakland and SF. The error bars on your forecasts run past the edge of the graph paper.
BTW, if anyone is interested in the actual forecasts that drive planning, here are some from the new San Francisco Bay Area Core Capacity Transit Study:
Projected Housing Units added 2010-2040:
129,280 San Jose
92,490 San Francisco
51,450 Oakland
Projected Jobs added 2010-2040:
190,780 San Francisco
147,370 San Jose
85,270 Oakland
“Dave, you’re just saying more of the same silly, unsupported, speculation as you’ve posted on here before about the futures of Oakland and SF. The error bars on your forecasts run past the edge of the graph paper.”
Awesome visual.
Those numbers are woefully in accurate. Between 2010 – 2014, San Francisco alone added roughly 90,000 jobs.
Regionally, of the 1.1 million jobs that regional planners estimated would be added to the Bay Area between 2010 – 2040, 40 percent of that total was already added by 2014. The growth predictions of your average regional Bay Area planning agency – which includes the SFBA Core Capacity Study, as well as Plan Bay Area – aren’t worth the paper they are printed on.
And given the “preserve it in amber” culture of the San Francisco voter, it is not out of the realm of reasonableness to see that over the next quarter of a century, that Oakland will absorb more and more of the housing unit & office space growth – especially given that more than any other municipality in the Bay Area, it is the most accommodating to new development in terms of its willingness to grant entitlement approvals and plan area CEQA approvals.
If I told you in 1985 (which would be 30 years ago, the same range of time as the 2010-2040 period cited in all these planning studies), that Oakland would be featured in the NYTimes and WSJ as one of the “hottest” cities to visit/live, with one of the region’s hottest dining/nightlight scenes, or that the African-American population would go from roughly half the City to roughly a quarter, or that rents in Oakland would be amongst the Top 10 most expensive city rental markets in the country – you’d bust out laughing & ask me who my dealer was, because I’d clearly been smoking some seriously good stuff.
Funny thing about long term planning horizons – they have a way of upending the “common wisdom” of the day. In 1985, in NYC, the crack epidemic was in full swing, crime was completely out of control, Times Square was home to peep shows & hookers, not Disney and Carson Daly, and Brooklyn was a sitcom punchline you got to by a subway people were too scared to use.
You need to consider Oakland in the broader context of the broader East Bay, including all of Alameda and Contra Costa Counties, whose transportation networks converge in Downtown Oakland. This is an area of over 2.6m people and growing quickly.
The dire condition of current and future capacity on the Bay Bridge and BART should inspire some fresh thinking on why half a million commuters squeeze through the transbay bottleneck, when they’re already passing through a major CBD along the way.
woolie, there’s no major CBD in the east bay. Both Alameda and Contra Costa Counties net export workers to both SF and the peninsula/valley. They have for decades and they will for decades. ~20% of the cars that drive westbound across the Bay Bridge at the peak AM commute are headed for the peninsula/valley. And the context in this thread has been the Bay Area of 7-8 million people.
HousingWonk, according to the US Census, SF added ~105k jobs from 2010 to 2014, though I’m sure EDD has different numbers. The message in these numbers is not the exact values. Sheesh, how they think they can forecast to 4 or 5 significant digits is enough to call their competence into question by itself. Nevertheless, even this forecast does agree with you that Oakland “will absorb more and more of the housing unit & office space growth” as a percentage of what it has now than will SF. Specially, it forecasts about a 5% greater percentage increase in Oakland population and jobs than SF, those are relative to what they have ~2010.
The point of these and any other forecasts is that SF compared to Oakland will add more people and more jobs total. SF has about twice the Oakland population and nearly 4 times the number of jobs. Nothing short of cataclysm is going to reverse that.
The other salient point is that SF adds jobs at about the same rate as it adds people. Since some of the new people don’t work (babies, retirees, SS junkies), many of the new jobs are done by folks that don’t live in SF. Generally, 40-45% of new jobs in SF are filled by people that commute in from outside SF. While Oakland and San Jose either just barely create enough jobs for even the working age population growth or they don’t keep up and export increasing numbers of workers to the two CBDs in the Bay Area that I mentioned above.
Oakland is “hot” because it is economically downwind from San Francisco, which has been on fire for years, not because of some indigenous Oaktown thermals. I read similar stories about Oakland back in the 1990s when SF RE prices had doubled from the previous tech-investor fueling. Back in the 1980s they were writing about how San Jose was “hot” due to the booming silicon valley economy.
Not sure why anyone wants to make these vague claims about Oakland. It is a fine place for what it is, always has been, and always will be: a suburb of San Francisco.
The “preserve it in amber” culture applies to the ~two-thirds of SF that is primarily residential. It clearly does not apply to the CBD, and the vast SoMa and eastern waterfront areas where most of the growth has been and is planed to be. Curiously, the same area that used to be primary pdr, industrial, and port. Most of which shifted to Oakland and the east bay long ago, freeing SF for the ~50 year growth boom we are about midway through and whose glow warms the burbs.
One thing vis a vis SF and Oakland are the airports.
Won’t happen but SFO (designation for SF airport) tells a tale.
A single SF/Oakland airport authority balancing traffic. Also, given the talk of a new BART tube, how about a new BART tube passing by Oakland airport and entering the West Bay at SF airport. Turning them effectively into a single airport and being more practical than a new tube coming into SF proper. IMO.
Bay Area population? I think its more than 7 million. Probably 7.5 or 7.6 million.
We don’t need a tube. Extend the AirBART cable car to SFO.
If the regional planning involves planning for a capacity in a City (SF) which is projected to absorb 190,000 jobs over a 30 year period, but is already halfway there in a mere 4 years – but the planned for capacity is at that 190,000 figure – then yes, Sherlock, you will run out of capacity in SF in a short period of time. At which point, employers will start looking elsewhere in the vicinity to base their jobs because SF will just stop making economic sense. It’s already starting to happen.
NYC is an excellent comparison – despite you completely ignoring it. Per the State Comptroller of NYS, in the period between 2003 – 2012, of the five boroughs of NYC, Brooklyn led all the other boroughs in job growth – at rate double the Citywide rate. The trendline has continued past 2012. Manhattan continues to command high office rents – and for those firms for whom it is critical – will continue to base their executive offices and other HNW type jobs there. But outside of that cream, the rent premium makes less sense for increasing numbers of firms. (Even within Manhattan itself, job growth has been higher in Upper Manhattan, than in the traditional CBD cores of MidTown and the Financial District).
[Editor’s Note: Or as we wrote last year, versus yesterday: A Tipping Point For Oakland’s Office Market?]
I wonder where this 90K or so jobs SF has added in the past 6/7 years are?
There have been no major job relocations to SF. The company in the article is small but moving to Oakland. As others are.
Are many/most of these service and support job? And UCSF health care industry related jobs.
Intereting that Google, Microsoft and Apple rumored to be looking at Oakland but not touching SF. Office-wise the Lennar HP development could be a bust. The hoped for tech companies are not coming on and this is a critical indication of the weakness of the SF office market IMO. So Lennar leases all its space or most to SF State, a huge private school academy and government related uses.
The major tech employers are not planting flags in SF. Even when a tech-friendly, supposedly, development like Lennar HP is trying to rope them in.
This is a red flag that SF boosters are ignoring.
Dave, new companies that go from 0 to 5000 employees are much more important to an economy than lumbering beasts like Microsoft looking to move a few thousand jobs somewhere. SF has many of the former, none of the latter.
from bloomberg:
San Francisco is outpacing the traditional industry hub to the south in job creation, driving up living costs and igniting a backlash over a widening wealth gap. The city had 57 percent growth in technology jobs from 2010 to 2013; Santa Clara County, home to Apple Inc. and Google Inc., saw job increases of 14 percent, according to state figures.
and of course, Oakland doesn’t get mentioned in articles such as this because job growth is slower, even though growing from a smaller base.
And being SF I would not be surprised to see multiple initiative in the next few years freezing major new office development (Prop M makes the 190 figure hard to attain) and restricting residential development to require 40% or so BMR.
The great hoped for up-zoning of SOMA and the 4th street towers lee is pushing won’t happen IMO. Nor the Flower mart project or 5M or the Gang tower. Voters will have the last say.
One or two of those initiatives pass and the ballgame in the Bay Area changes big time.
HousingWonk, that study is just to help set priorities and coordinate cross-agency. It isn’t going to create the actual capacity over the next few decades, nor constrain BART or Caltrans or SF or Oakland or anyone else from doing whatever they want. The same (usual suspects) agencies will blow $3 million to decide the same things they decide every time they do this, which is to focus the bulk of transportation infrastructure investments on pumping more people in/out of the SF CBD. To set priorities what matters is that the 190k for SF is much larger than the 85k for Oakland, not whether it should be 240k or 300k or more. The old ‘I don’t have to outrun the bear, I have to outrun you’ algorithm. And if you think SF will “run out of capacity” based on a 190k forecast, what’s gonna happen to Oakland building capacity based on an 85k forecast?
We have the last two employment booms to show what happens if they do nothing or lag far behind the demand (almost for sure gonna be). Folks will still get to work. It will just take a little longer, the commute peak will grow by another hour, the gridlocked area will be a few more blocks in all directions. Big deal, or more like that’s the plan no matter what the study says. And if we get way behind adding more office space, the geniuses in the corner offices will hire ‘consultants’ to tell them employees need 50 sqft/person less than whatever they have at the time. Gridlock and shared office space are how we know we beat ‘expectations’ and are ‘ahead’ of plan. All these only increase the premium on existing office and residential space near the SF CBD. The hot get hotter under compression.
The ‘OMG SF is so expensive and is running out of office space and housing forcing companies and their hirelings all the way to the east bay’ happens with every boom. Notice how the theme in these articles are how nearly everyone wants to be in SF, but they can’t, so they settle for …. It’s like a restaurant that remains half full until the lines/prices get too great at the ‘hot’ restaurant across the street, and then they get those turned away.
This isn’t some kind of zero-sum-game between SF and Oakland or SF and the east bay. They’ve all got roles, some of which overlap. In particular, SF will have more job growth than housing growth because the density is more valuable for office than home and the east bay will have more housing growth than job growth because it has a lower cost of space, and bizarrely people like space to live in more than they like it to work in. And that means we need more BART to handle the growing commute flow between them.
It is more economical (ROI) to increase office density and scale in SF CBD along with a second BART tube than to create a separate and less than equal high density office core on the shores of Lake Merrit. Not that there won’t be office growth in Oakland, just never enough to surpass SF. And Brooklyn will never surpass Manhattan either. I read that in a fortune cookie, so it must be true.
Frankly, I’m not sure what you expect from a Brooklyn v Oakland. Brooklyn is 2.6 million people in less than 100 sq miles. There’s nothing comparable in California. Oakland has about the same population as Brooklyn had in 1870. The game of forcing all the NYC metro pieces into the SF metro or Bay Area map really doesn’t respect either one.
UPDATE: Uber Paid $123.5 Million For Uptown Oakland HQ.