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“We are coming off of several consecutive quarters of low transaction volume, but we are seeing a significant amount of tenant activity in the market today, which has the potential to change the dynamics of Oakland’s office market and jump start a recovery.”
Cushman and Wakefield, 1st quarter 2010
Oakland’s robust office market has held fairly strong in the face of the recent economic downturn, with sub-lease activity staying fairly level compared to spikes in other Bay Area office centers. In fact, over two million square feet of office space is now fully entitled for development in the Central Business District, including prime sites along Broadway, Lake Merritt and Downtown City Center.
Downtown Oakland is home to a vast telecommunications network with hundreds of miles of fiber-optic running throughout primary corridors in the Downtown and Jack London Square. This telecommunication infrastructure is a major attraction for global technology companies requiring high bandwidth.
The Downtown and Jack London Square also offers excellent access to transportation and other amenities, including 3 entrance points to BART, ferries at Jack London Square and other transit systems. A growing entertainment district in Oakland’s Uptown and Old Oakland districts offer an abundance of restaurants, nightclubs, art galleries and other amenities.
Oakland’s Central Business District and Jack London Square contain nearly 19 million square feet of office space, including 8.7 million square feet of Class A space. Class A vacancy rates have increased from its 8% average since 2004, to approximately 12%, reflecting the current economic environment. Annual rents range from $23.40 to $36.00 annually, with average rents falling almost 7% since the 3rd quarter of 2009, to $31.68.
Oakland’s office space is going green. Oakland now boasts almost 8 million square feet of LEED rated (U.S. Green Building Council) and/or Energy Star rated (Environmental Protection Agency) office space, including 26 Class A and B commercial buildings. All of the Class A buildings are LEED rated Gold, indicating a high level of sustainable development. In 2010, the City itself passed its Green Building Ordinance, requiring that all future commercial building development receive a minimum LEED certificate of Silver.
“Green sector” and “digital media” sector leases appear to be driving the Oakland market in early 2010. Sungevity (emerging solar company), First Solar (enterprise solar company) and Rumsey Engineering (“sustainable” mechanical engineering) highlight the potential for this sector to emerge as a demand driver for Oakland office space. A new lease for the high-growth Pandora (internet radio) and newcomer Skytide (video analytics) join the growing number of digital media companies enjoying the access to high bandwidth – and after-hours entertainment venues – in our Central Business District and Jack London Square.
For more information about the Office market, contact Aliza Gallo, firstname.lastname@example.org or (510) 238-7405.