By: Katherine Billingsley, Research Analyst | Oakland-East Bay
The tech sector has been good to the Oakland-East Bay Area in recent years. Talks of tech takeover continue to make its way through the East Bay circuits, and as markets like San Francisco and Silicon Valley continue to tighten, startups and veteran tech tenants are looking to the sunny side of the Bay for relief. This trend is discussed in more detail in JLL’s Technology Office Outlook for 2015.
This year’s report includes a new Locator Matrix that takes a cost-sensitive approach to determining where each market stands in terms of suitable environments for startups to grow. Oakland-East Bay falls in the same quadrant as other well-known tech markets San Francisco, Silicon Valley, and New York – high cost, but high startup opportunity – and recent market trends indicate that the East Bay is poised for continued growth in the startup community.
In Q3 2015, tech giant Uber purchased a 330,000-square-foot building in the Uptown District in Oakland. This transaction heightened anticipations for more tech to flow into the market. With a hefty amount of tech-related organizations (incubators and accelerators, tech workshops, and co-working spaces) already peppered around the area, companies have plenty of labor supply to tap into, in addition to the notable institutions that are responsible for a large chunk of the engineering talent that is in and around the East Bay, such as UC Berkeley, UCSF, and Stanford. Additionally, venture capital funding has been increasing in the last few quarters, giving companies the opportunity to expand their footprint as well as their workforces.
Oakland’s CBD is the ideal place for creative tech companies to set up shop. However, as Oakland’s market tightens (aka there are limited availabilities and rents are currently at $30.83 per square foot and rising), tenants find that there are more options in the suburbs. Both Workday and SAP leased space in the suburbs, Pleasanton and San Ramon, respectively, inking 150,000-square-foot deals.
Coupled with rising confidence from venture capitalists in East Bay startups and a strong, growing economy, the presence of tech companies in the East Bay should continue to increase.