Optimistic outlook for Oakland

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July 30, 2019

By: Kat Billingsley, Research Analyst, JLL

The City of San Francisco is inching closer to Prop M limitations while new developments are leasing up. According to JLL’s “Impact of Prop M” report for July 2018, only two million square feet of office space is available in the current allocation period, with almost nine million square feet pending approval. If nothing new is added to the queue, it will take years to accumulate enough square footage for allocation to develop each project. Not to mention, these projects still need to go through review and planning, which could take even more time (like, years). This could be good news for Oakland, since larger companies may need to look elsewhere.

A new Oakland

Oakland has benefitted in the past from a demand overflow from San Francisco, triggered by a pivotal moment in 2015 when ride-share giant Uber purchased Uptown Station. This was the first headlining tech company to commit to Oakland, putting the spotlight on the East Bay.

Downtown Oakland transformed into a Bay Area destination. The city’s efforts to revitalize downtown by adding vibrant retail, restaurant, and residential projects illuminated the area and lured residents, visitors, and companies alike. All the while Bay Area’s cost of living was rising (and still is), especially in San Francisco where housing costs were increasingly becoming less affordable. Coupled with new revitalization efforts, the East Bay quickly became an attractive option for people looking to cut their costs. From 2010-2016, the number of new residents in the East Bay reached nearly 100,000 people, compared to an average of 44,000 people across San Francisco, Silicon Valley, and the Mid-Peninsula.

More than one million square feet of companies

Needless to say, interest from markets across the Bay Bridge gained traction in the East Bay, and the first stop was Oakland. Since 2015, about one million square feet of companies greater than 10,000 square feet have expanded or migrated into the East Bay, primarily to Oakland. Of that, 90% were San Francisco-based. Blue Shield (200,000 square feet), WeWork (82,000 square feet), and Delta Dental (82,000 square feet) are among the top companies that migrated or expanded into Oakland in recent years.

We’re building…will they come?

Today, Oakland’s tight vacancy of 6.6% (only 3.5% for Class A) allows for limited movement, not to mention rents for Class A and Creative Class space are at all-time highs. So how could Oakland benefit from San Francisco again, you ask?

We are tracking 1.5 million square feet of new or redeveloped office space in our development pipeline set to deliver by 2019, inclusive of Uptown Station. Other developments include 601 City Center and The Key at 12th, which are partially leased. Future developments could potentially include the proposed 2 Kaiser Plaza and 2100 Telegraph, which would add another 1.7 million square feet of new space to the market. In addition, office demand for Oakland Metro is strong at two million square feet, with roughly 40% coming from San Francisco.


Though migration/expansion activity has seemingly tempered in the last 18 months, new and organic demand could mean an optimistic outlook for Oakland, and while San Francisco could be years out from new development approvals, Oakland is well-positioned to gain momentum as projects deliver in the near future.

About me 

Kat Billingsley

I proactively deliver research-based information, statistics, and insight on the market and economic activity, conditions, trends, and outlook for the East Bay-Oakland and North San Francisco Bay regions. Strong relationships with brokerage, clients, and fellow team members help me facilitate the use of research as a differentiator in business development efforts.

You can email me directly at k.billingsley@am.jll.com.



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