While demand for office space in San Francisco slipped last quarter, asking rents in Oakland’s Central Business District gained 8 percent, are up 36 percent versus the same time last year and have hit an all-time high, eclipsing the dotcom era peak at the end of 2000.
In addition, the office vacancy rate in Oakland has dropped to 3.1 percent, versus 5.7 percent in San Francisco, according to Cushman & Wakefield. That’s down from 8.5 percent at the same time last year and in large part due to a complete lack of new construction in the city, which will continue to put upward pressure on rents, but also constrain growth, through the end of the year.
That being said, at roughly $47.65 per square foot per year, office rents in Oakland remains 30 percent cheaper than in San Francisco, down from 50 percent cheaper at the end of 2014 when we outlined why Oakland was at a tipping point with respect to demand for office space and growth.
Comments from Plugged-In Readers
we’re located across the street from Pandora and down the street from the soon to be Uber office. We signed a 7 year lease in 2014 for a fantastic price ($24/ft). we got lucky and timed it right, but can’t help but wonder if we should have signed a 10 year lease.
yeah, but hoping there is a plateau and the timing works in our favor again in 2021. as with most commercial leases, our rent goes up each year, so between the annual increases and the slow down that will have to eventually come, we’ll sign another 7-10 years. (hopeful thinking)
“wonder if we should have signed a 10 year lease.”
Well, It depends. Do you have an actual viable business model, unlike Pandora and Uber? Are you “disruptive,” or do you provide a good or service that isn’t detrimental to society and the macro economy?
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