Oakland "Hot" New Destination for Tech Startups

By Cheryl Hurd
|  Friday, Jun 27, 2014  |  Updated 11:35 AM PDT
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Tech companies are now branching out into the East Bay, favoring Oakland over San Francisco and Silicon Valley. Cheryl Hurd reports.

Tech companies are now branching out into the East Bay, favoring Oakland over San Francisco and Silicon Valley. Cheryl Hurd reports.

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Tech companies are now branching out into the East Bay, favoring Oakland after being priced out of San Francisco and the Silicon Valley.

Erik Collier serves as one of the general managers of Ask.com, a search engine company that moved into Oakland's City Center from Emeryville in 2004.

"We knew it was cool before it was cool," Collier said. "We were looking for more space. Oakland seemed to be a great spot, a central location to transportation."

Other startups and tech companies moving into Oakland point to the cheaper costs of doing business, especially compared to San Francisco or on the Peninsula.

The average price for an apartment in San Francisco is $3,500. Oakland's average rent is about $2,000 a month for an apartment.

"All the young techies want to be in the East Bay," Oakland Councilmember Lynette Gibson McElhaney said. "It is so hot. They don't want the sterile environment of those isolated campuses of the old tech."

McElhaney considers old-tech powerhouse companies to be the likes of Facebook, Google and Apple, all of which helped make Silicon Valley famous, simultaneously driving up rents south of the City in San Mateo and Santa Clara counties, neither of which have much in the way of rent control.

She is touting Oakland as the next big thing for the tech industry.

"At this point, Silicon Valley is old money," McElhaney said.

The Sears and Roebuck building in Oakland will soon become part of  the city's renaissance. The building has been sold and the new owner plans to turn the building into retail and office space for more start-up companies.

Oakland restaurateur Irfan Joffrey, owner of Camber, said the upswing seems to be gaining momentum.

"A lot of new businesses are moving in," he said, "just because other businesses are coming into town so they can benefit from the economy."

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