New numbers are showing a potentially promising future for business growth in Oakland and surrounding cities.
A new report from real estate firm CBRE shows more businesses are interested in leasing space in the region, showing tenant demand has increased by nearly 30%, the highest in five years.
“While vacancy is still high, leasing activity is basically we have more companies come back to the market,” said Howard Huang, market analyst with Avison Young.
Pre-pandemic, the overall vacancy rate was close to 8%. Currently, office vacancies in the Oakland region are close to three times that, more than 21. But Huang said there are signs we have hit a turning point.
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“We think the recovery will take a little bit longer than expected but it is on its way, and we have passed the inflection point,” he said.
The biggest growth is being driven by new large building leases in Emeryville and Alameda. While Oakland is seeing both new and renewed leases being signed in spaces.
Experts believe more employees returning back to in-person work, opportunities to expand for less, and landlord incentives is helping to drive the market.
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“A lot of class and office landlords are a lot more willing to give concessions in free rent months, and tenant allowances as well as lower asking rates,” Huang said.
Estavillo Law Group has been based in Oakland since 2011 and is now expanding in a new location. CEO Jason Estavillo explained the market is allowing him to move into a nicer building with added amenities without breaking the bank.
“It’s a buyers’ market right now,” he said. “As a business owner, we were able to upgrade to a better location, we are class A now, I think we were in a class C before without a significant increase in overhead.”
Estavillo said that he hopes the change in location will encourage employees to come to work and invest into the community.
“One of the reasons we moved into our current location is we believe it is a safe environment,” he added. “We are close to the city center, we are close to BART on 12th Street, and people are able to walk outside and go shopping, get coffee."
With numbers moving in the right direction- experts hope fewer vacancies will come by the end of the year.
