The office vacancy rate in the East Bay, not including Walnut Creek or further east, ticked up to 17.9 percent at the end of September, which includes 4.6 million square feet of un-leased space and 1.2 million square feet of space which has been leased but is sitting vacant and actively seeking a subletter, according to Cushman & Wakefield.
While East Bay landlords appear to have held firm in terms of asking rents despite the increase in un-leased office space, with the average asking rent having inched up one cent ($0.01) over the previous quarter to $4.47 per square foot per month, which is $0.05 (1.1 percent) higher than at the same time last year, the average asking rent is being skewed by negative absorption in the region’s most expensive submarkets (i.e., mix). In addition, landlords have been giving free rent and build out allowances rather than reduce rack rents.
In fact, rents in Oakland’s Central Business District (CBD) have actually dropped 8.8 percent ($0.48) over the past year to $4.98 per square foot, with 3.2 million square feet of that aforementioned 5.8 million square feet of vacant space located in the CBD, which is up from 3.1 million square feet of vacant space in Oakland’s CBD at the end of June and 2.3 million square feet of vacant space at the same time last year.
And yes, the numbers above take into account Twitter’s lease of 67,000 square feet of space at 1330 Broadway and Callisto Media’s sublease of 78,000 square feet of space at 1945 Broadway.
In other words, less than less than 10% of total office inventory has been released or left vacant, compared to the previous baseline, during the worst pandemic in a century.
Lots of folks are getting out of dodge once their lease expires. In our building, recent casualties include an insurance agent who shut down their office (3-4 staff pre-pandemic) and retired. Saw a guy at the elevator today who used to work next door (and hasn’t been seen for a year and a half). They’re moving out and consolidating operations in eastern Alameda County.