Oakland has finally come into its own. No longer the step-City to San Francisco, Oakland’s art, food and entertainment districts have become magnets for San Franciscans to visit Oakland for their fun, not the other way around. Besides drawing the hip, tech crowd from San Francisco and Silicon Valley, Oakland is also drawing new tenants, homebuyers, businesses, developers and investors.
In order to meet this demographic demand, there are over 7500 new residential units in the pipeline. The Broadway Valdez district has two big projects with cranes in the air, and several others on the drawing board. Uptown and Jack London square are also attracting developers. One of my developer clients just closed escrow on a 6,000 sq. ft. lot in Jack London Square and is planning to build 20 high end condos or apartments. North Oakland is also hot. One of my developers is finishing a warehouse to live/work project with 18 units. Another developer is breaking ground in June to convert a warehouse to 12 live/work units and 15 new apartments. Rents are up over 20% in the last year. Even with Oakland’s strict rent control apartment buildings are being snapped up at less than a 4 CAP Rate for prime property. Very little on the market, lots of buyers willing to pay whatever it takes.
Retail is finally being developed with a new Sprouts Grocery store and CVS pharmacy on Broadway, and the new Safeway redevelopment on Broadway and 51th is underway, creating 320,000 sq. ft. of retail. The Broadway Valdez Plan envisions a total of 1,000,000 sq. ft. of retail and 700,000 sq. ft. of office over the next 25 years along Broadway’s Auto Row.
The downtown office market received a huge boost with Uber buying the old Sears building. Office buildings have being selling a high prices per sq. ft., and office rents are rising. With a 4% vacancy factor in Downtown Oakland, new office constructing is looking likely.
After 30 years of watching Oakland struggling to take its place as a world class City, I finally see it happening!