January 8, 2014

Oakland Market Set To Gain As Companies Exit San Francisco

Oakland’s Central Business District ended 2013 with an office vacancy rate of 12.6 percent and an average asking rent of just over $2.50 a square foot versus closer to $4.25 per square foot in San Francisco according to Cassidy Turley.

With many companies in San Francisco having signed deals for office space in 2009 and 2010 now facing renewals and rent increases in excess of 50 percent, expect the East Bay office market to heat up in 2014 as both established companies in San Francisco and startups seek out less expensive space, particularly in areas with easy access to BART such as Oakland.

First Published: January 8, 2014 11:15 AM

Comments from "Plugged In" Readers

Why don't they simply build these "iconic" skyscrapers in Oakland then, instead? Build the tech housing there, there is less culture in Oakland. Why are we eliminating our local culture and rents for this stuff, when Oakland has so much empty land?

San Francisco will never be a business powerhouse, stop trying to force it and thus unraveling the culture that has made SF famous in the first place.

Posted by: Hawkins at January 8, 2014 1:23 PM

"There is less culture in Oakland". Whose culture? What culture? Kindof an odd statement.

Posted by: outtahere at January 8, 2014 1:38 PM

^Unfortunately that ship has sailed.

It's only a matter of time before this happens. Occupy set commercial development back about 12-18 months but Oakland is geographically well positioned and has a great transit spine from Rockridge through to the Coliseum. If I was an investor I would proceed with caution as Oakland has a history of promising much but ending up delivering very little.

Posted by: Willow at January 8, 2014 1:39 PM

This tech hatred really comes down to one thing- ageism. You see this hatred spewed forth from the middle and older aged San Franciscans. It is veiled hatred toward young people, since the tech worker is generally 30s and under. They veil it under the guise of trying to save SF's culture, or middle class, but it is really nasty in its essence. Guess what? We're not going anywhere, and you will be long gone before we will.

Posted by: sf at January 8, 2014 1:52 PM

In a way, I agree sf. It's agism but more so the sense of distress that the world is passing them by. And the old fashioned sense of cultural superiority that use to drive imperialism. Happens to most, as I know... I'm tickling 50.

Don't go anywhere and please, please vote!

Posted by: StMarket at January 8, 2014 2:05 PM

@SF I'm very sorry but I call BS on your post! Show proof that it's an "ageism" thing, then explain why older tech workers are having a hard time getting jobs. Boy

Posted by: sfjohn at January 8, 2014 2:06 PM

sf: I think you are way off the mark. I've lived in SF since 1975 (yeah, I'm older) and raised a child here. So, I know a lot of people in SF currently in their 30s. Every single one of them expresses a lot more animosity toward the young tech workers who have flooded into the city in recent years than any of the people my age I know here.

Most of the people under 40 who were born and raised here are NOT tech workers and they ARE being forced out. I know the attitude that SF is for the financially well off only and everyone else has no right to be here and should just get out is very popular on SocketSite. However, it is really cold and heartless to tell people that they have no right to live in the city of their birth simply because they did not choose to go into tech or a few other very well remunerated fields.

This really has nothing to do with age. This is about values.

Posted by: AnotherSFer at January 8, 2014 2:14 PM

I'm with sf, I get tired of the folks claiming they are protecting some sort of "culture" and then spewing hatred and insults.

I'm glad to see some improvement happening in Oakland, but not because of some fear of change in SF, but because there are lots of great things about Oakland and they've been going through some rough times, but hopefully the tide is turning.

Oh, and there's lots of culture in Oakland. There are lots of great bars, music venues, restaurants, and the art scene is quite strong.

Posted by: lyqwyd at January 8, 2014 2:15 PM

"it is really cold and heartless to tell people that they have no right to live in the city of their birth simply because they did not choose to go into tech or a few other very well remunerated fields."

Uh... I haven't seen a single person take such a position.

Posted by: lyqwyd at January 8, 2014 2:20 PM

Guess what, tech workers have every right to be here as much as your 3rd generation grandmother. Both are products of migration, immigration, and/ or emigration. That's the beauty of America. SF pretends to be this catalyst of internationalism and diversity, yet the average SF resident spews hatred and vitriol to everybody who doesn't fit into their tiny box of who they think should live here. A tech worker is coming here because that is where the jobs are. Don't blame the messenger (or the twitterer). Just like the Anglo settlers came here and ended up pushing out the native American Ohlone. So either stop pretending you are anything but xenophobic, or deal with the reality that you have no more of a right to be here than somebody who stepped foot in the city 30 minutes ago.

Posted by: sf at January 8, 2014 2:22 PM

Come on peeps , we all know that one of the odd things about San Francisco is that many residents were not born here.

As for the cost of housing , its really the fault of those locals that prevented needed housing to be built over the last 20+ years.

The one thing that might make it easier though to stay in San Francisco is that currently there is a LOT of housing now under construction or approved to be built, but we are still looking at a few years from now before supply can begin to keep up with demand.

Posted by: Joseph A at January 8, 2014 2:31 PM

Yah -- I'm really saddened by this trendy hatred of tech workers too -- it is so misplaced. The tech workers are not pushing folks out -- it is the high price of rent that is doing so -- and rents and housing are expensive because of 30+ years of a trendy hatred of "evil greedy developers" by those who have been living here. Long time SF residents have done a great job of halting new housing construction, and thus caused housing prices to go through the roof.

but nooone likes to blame themselves -- it is so much easier to hate others -- classic racism rearing its head in a new guise.

Posted by: BigV at January 8, 2014 2:34 PM

This comment chain quickly went off topic. The article is about commercial development, not residential. I think Oakland needs a building downtown that breaks the 30 story barrier by at least 10 stories.

Posted by: Sassy at January 8, 2014 2:51 PM

I'd take 5 blocks of 10 story buildings over one fifty story building.

Posted by: outtahere at January 8, 2014 3:02 PM

I agree that the tech backlash includes a lot of ageism - but it's ageism from the hipsters to the older generations, not the other way around. I'm near 50, love tech, and was (and still am) excited about SF booming and being a vibrant, exciting place. But even I am tired of all the 20-somethings who think that a few bitcoins makes them masters of the world - that it's "culture" to show up at One Market in Converse All-stars and a t-shirt - that it's cool to blast through crowds on skateboard.

Guess what: *every* generation thought they were the bomb when they were in their 20s. Think 1960s hippies, 1980s preppies, etc. By the time they're in their 40s, the smart ones realize that the world existed long before they were, and will be here long after; and the narcissistic ones just crash and burn (and fume at the then-current bright young things).

So, hipsters, welcome to SF, and glad you're here. Treat others nicely and you might be surprised what a great city we could build together.

Posted by: Sierrajeff at January 8, 2014 3:31 PM

@SF

Agism? The people I saw breaking the Google bus windows looked to be in their very early 20s!

By the way, I was born in SF in 1954. Washington HS grad. I welcome all new comers, including tech workers. By the way, the last time I check didn't the Constitution protect the right to travel. People can live and work where they want...don't let the late comers chase you away!

Posted by: Older at January 8, 2014 3:40 PM

1 - Long timers who are really serious about staying long timers will buy a place where they live. Market cycles allowed for more than enough buying opportunities. If cheap rent/rent control prevented them from jumping to the homeowner ship, who's to blame? I benefited from rent control 3 1/2 years ago and yet I bought for the increased sense of stability.

2 - I am not so young and work in tech. All my GOOG friends are veterans of tech bubble 1.0 and in their late 30s-early 40s. 1/2 of my co-workers are more than 40. Tech is becoming mainstream age-wise.

3 - There is culture in Oakland. Plenty of it. Oakland should try and undercut SF on all our weaknesses: HSR can't seem to want to come here? Get it done in Oakland! SF can't house its hordes of tech folks: bring companies by adding corporate space, build great housing units with features that SF can't have like more parking, more amenities, etc.

SF could use a bit of healthy competition. Bring it on.

Posted by: lol at January 8, 2014 4:03 PM

I'd take 5 blocks of 10 story buildings over one fifty story building.

I wouldn't agree with you, but the problem isn't blocks of 10-storey buildings. The problem is SOMA filling up with 4-storey buildings.

Posted by: BobN at January 8, 2014 4:18 PM

lol, couldn't agree with you more. We were at $1800/month for a large 2bdr in a hot neighborhood several years ago, but bought for the same reasons. Most of the real locals have done the same in their neighborhood, or moved to the Avenues where it remains somewhat affordable. (It seems to me that most of the complaining comes from long-term tenants of now fashionable neighborhoods. Oh well.)

Oakland could be amazing, and should undercut SF wherever possible, but the City Gov't is completely incompetent, and there is also an strong undercurrent of anti-displacement, anti-progress, anti-change in Oakland. The prospect of losing all 3 pro teams is changing that a little bit, but not fast enough. Agreed on HSR though. Put that terminus at Jack London and avoid the headaches of SF/Peninsula NIMBYs.

Posted by: rabbits at January 8, 2014 4:44 PM

Still lots of land to develop here in SF before the exodus to Oakland. Higher hopes for cleaning up and making the 6th street corridor better/safer and mission bay largely untapped.

Posted by: eddy at January 8, 2014 4:53 PM

There are some really nice parts of Oakland, such as Rockridge, Grand Lake, parts of the Lakeshore area, and the hills (although the commute can be brutal from the hills), and lots of fun things to do.

I hope things pick up in Oakland and they can get a grip on the crime problem, but as rabbits points out: the leadership in Oakland is even worse than in SF. The series of Dellums and Quan as Mayors have been a disaster for Oakland. The crime has gotten ridiculous.

Posted by: lyqwyd at January 8, 2014 5:08 PM

For what it's worth, current conventional wisdom is that significant high density res will happen in Oakland before high density office. The economics are still not currently there for developing new office towers in Oakland. Several are entitled, including a hole in the ground owned by Shorenstein. If they get off their butt, maybe the floodgates will start to open, but they are not stupid. Everyone is watching rates.

I do think Oakland is on the verge of REALLY turning around. The discovery of the City by large numbers of young folks/artists is really changing many neighborhoods around downtown (Temescal, West Oakland, Lake Merritt). I think Oakland can only be killed by it's political leadership, which ever since Brown left has been notably lacking.

I agree with Willow...I think it would have turned earlier had Occupy not become such a dysfunctional mess in Oakland. Haven't seen the black bandana anarchists around lately, and I'm hoping they stay away.

Posted by: curmudgeon at January 8, 2014 5:18 PM

During summer 2013 I was looking to move a Berkeley-based company into downtown Oakland. We found that almost every space we bid on went to a non-profit leaving San Francisco.

Hopefully 2014 will bring news of exciting commercial development plans in downtown Oakland. Lord knows there are more than a few open lots that could be put to more productive use!

PS - Can we avoid looking at this as San Francisco vs. Oakland? Both cities are vital partners in healthy and prosperous Bay Area!

Posted by: Hancock at January 8, 2014 6:01 PM

As for the comments from many above that the 20 something techies are here to stay. That's fine. I would like to inform them that before they know it, they will be 30 somethings and then forty somethings. It goes a lot quicker than you realize. I absolutely guarantee you that 40+ provides a far different perspective.

As far as the pearl clutching and indignation over being a persecuted group, facing nothing but adversity and hate...I am now playing you a selection of sad music on the world's smallest violin

Posted by: sjg at January 8, 2014 7:39 PM

When the employees start getting mugged and/or are the subject of "Apple picking," they'll come running back to the city.

Posted by: Pfffttt at January 8, 2014 10:14 PM

"When the employees start getting mugged and/or are the subject of "Apple picking," they'll come running back to the city."

People don't get mugged and apple picked in San Francisco? On the contrary, it happens every day.

Posted by: mow at January 9, 2014 12:02 AM

However, it is really cold and heartless to tell people that they have no right to live in the city of their birth simply because they did not choose to go into tech or a few other very well remunerated fields.

Please tell me how you would prefer that the scarce resource of housing is allocated. I am sincerely interested.

Posted by: NoeValleyJim at January 9, 2014 12:45 AM

It's good news for everybody if Oakland starts to become a functioning, civilized place. I don't know why anybody in SF would not think this is great. It's like if your developmentally challenged little brother learns to use the bathroom by himself. Win-win.

Posted by: formidable doer of the nasty at January 9, 2014 8:46 AM

"it is really cold and heartless to tell people that they have no right to live in the city of their birth simply because they did not choose to go into tech or a few other very well remunerated fields."
Uh... I haven't seen a single person take such a position.
--------
Really? I and all of my friends and associates take that position. No one has a legal right to live anywhere they want. Life is a competition, and money is freedom to do what you want and live where you want. Lack of money = lack of opportunities in life, and people need to chose their professions with this in mind.

Posted by: anon at January 9, 2014 9:16 AM

my views of the tech worker influx is it is simply too much of a good thing. It is not animosity toward individuals but it really is changing the character of the City IMO for the worse. But nothing can be done and the ship has sailed so there is nothing more to do but leave.

Posted by: zig at January 9, 2014 9:23 AM

"Just like the Anglo settlers came here and ended up pushing out the native American Ohlone. So either stop pretending you are anything but xenophobic, or deal with the reality that you have no more of a right to be here than somebody who stepped foot in the city 30 minutes ago."

Did this person really just make an ethnic cleansing analogy to what is happening today? The arrogance is spectacular

Posted by: zig at January 9, 2014 9:27 AM

@anon

OK, I stand corrected... you take that position.

I always interpreted your position as anybody has the right to live in SF as long they are willing to pay the fair market price, which IS a different position than "they have no right to live in the city of their birth simply because they did not choose to go into tech or a few other very well remunerated fields." That has nothing to do with a legal right, and in fact is a statement saying some people do not have the right to live in SF.

My position is the former: anybody can live in SF if they want it bad enough, but I certainly don't favor additional rights simply because somebody were born here.

Anyway, back to Oakland. Yes, it does make sense for housing to be built up first, as businesses generally have to make a somewhat long term commitment to a location, while it's quite easy to move to another city for an individual or family. Brown was on the path to adding a great deal more housing, but he was termed out. Of course he also had the advantage of being the mayor during the good times, and didn't have to deal with the effects of the great recession in Oakland, although he probably would have done far better than Dellums or Quan.

And I agree this is not a matter of SF vs. Oakland, they can (and hopefully will) both improve at the same time.

Posted by: lyqwyd at January 9, 2014 9:30 AM

"I do think Oakland is on the verge of REALLY turning around. The discovery of the City by large numbers of young folks/artists is really changing many neighborhoods around downtown (Temescal, West Oakland, Lake Merritt)."

Not being facetious here at all but if middle income type people take over large parts of the flat lands of Oakland (and it has been happening for a long time already) where do the working class and poor people go in say 10-20 years? How do they form new families? Despite what people think, in poor areas decent people greatly out number the dysfunctional. Oakland is already getting unaffordable for many.

We have huge regional housing and access problems in the Bay Area.

Posted by: zig at January 9, 2014 9:36 AM

"Not being facetious here at all but if middle income type people take over large parts of the flat lands of Oakland (and it has been happening for a long time already) where do the working class and poor people go in say 10-20 years?"

I have a great suspicion that many areas of Oakland will not be taken over by middle income people if only because the housing stock is so small/poor. The areas of Oakland that are gentrifying are typically areas that contain substantial numbers of well built homes and are close to the city center. A great deal of Oakland (and San Leandro, Hayward, etc.) consists of smaller homes that I believe will remain "working class" for the foreseeable future.

However, if some of the nicer areas of Oakland continue to gentrify you might see an expansion of the tax base. If properly spent (a big IF in Oakland), this money could benefit the city at large.

Posted by: parklife at January 9, 2014 9:54 AM

^ exactly, parklife. Even if the entire north of Oakland gentrified, there would still be all of East Oakland and that covers a huge land area. There is little danger of gentrification there, but stabilization would be great. Including more capital investment and public safety.

Posted by: curmudgeon at January 9, 2014 9:59 AM

Oakland is almost a great city and it would be amazing to see it really turn the corner. We lived there for four years and loved it (Rockridge and then the hills), but starting around the Occupy time and pretty consistently since, all our neighbors started getting their homes and cars broken into. Usually it was no big deal, but some of the crime got really bad (one neighbor shot in the arm in front of his house on arguably the most expensive street up there, another old woman barricaded in her bathroom during home invasion). We had a baby, I travel for work and we wanted to buy a house. Very reluctantly we realized we didn't want to be somewhere where our house felt like a target - that required having cameras and alarms and constantly emailing neighbors about every unknown car going up and down the street. We ended up moving to Marin (which we love for many other reasons), but it felt like a shame to leave Oakland for the reasons we did. I don't have extremely high expectations for the city until competent leadership is elected, although other forces seem to be trying to turn things around.

Posted by: pvc at January 9, 2014 10:24 AM

I was in Oakland NYE. It was a lot of fun. Glad I don't live there. Overheard the next morning by the gas station attendant as I was filling up on my way out: "It was a great night last night, I only heard one gunshot!"

Posted by: sf at January 9, 2014 10:45 AM

Rather than respond directly to the individual responses to my initial comments above I will simply let my original point stand:

The concern about what is happening to this city and the conflict resulting from that has nothing to do with age. It is about values.

Posted by: AnotherSFer at January 9, 2014 3:57 PM

Well, based on what you've said I happen to prefer the techies' values to your values. So there. Now who of us gets to decide who should live in SF?

Posted by: formidable doer of the nasty at January 9, 2014 5:15 PM

"it is really cold and heartless to tell people that they have no right to live in the city of their birth"

what a sense of entitlement! being born here gives one no more right to be here than the 21yo MIT grad who got here yesterday, or the 55 yo old new CEO who cam last friday.

what is up with this birthright argument? Ive been here 19 yrs and have heard so many "native San Franciscans" talk about being native and how that gives them some right. Thats total BS.

i dont see any of this having to do with age. Its pure jealousy and classism.

the tech workers (as a group) have nothing to do with anything averse going on in the city. Most cities would kill for new high paying jobs that tech brings in.

as for the arguments that artists and teachers and baristas and bartenders need to live in SF too, I have to ask why do the HAVE to? If i couldn't afford to live in SF, then I wouldn't and I wouldn't be mad at some other group because of that. I would either grin and bear it or try to change my own circumstances. SF is no different than Manhattan or central London or central Tokyo in this regard. artists, teachers, baristas and bartenders always live on the outskirts (e.g. oakland or brooklyn or hobokken) unless they are the top of their profession or come from money.

as for grandma and the truly indigent, i do think they need a lot of protections. But my buddy the bartender , and his friend the metal sculptor,will have to fend for himself.

BTW, i am in biotech, which is more tech than tech. there are plenty of older techy people. its not 1993 when the internet was new. Tech has been around awhile and older people are tech savvy.

i personally see nothing but good coming from all the new high salaried jobs in the city. Do people prefer no new jobs, or only low paying jobs, or maybe more people in poverty to move into SF?

Posted by: moto mayhem at January 9, 2014 5:17 PM

Those that have given SF it's culture and put the city on the map have almost always been newcomers and non natives.

Like the entire SF Giants franchise, full of young, white, wealthy jocks.

Get over it.

Posted by: sf at January 9, 2014 7:02 PM

Not only have the comments been off-topic but the amount of ignorance on here is sickening. It's almost as bad as the comments on sfgate.

It seems that a lot of posters on here haven't ever stepped foot in Oakland. Less culture? Less civilized? Comparing natives of present day SF to the Ohlone people?

Are you kidding me?

Posted by: recovering_bear at January 10, 2014 6:43 PM

You're right, Oakland doesn't have less culture, it has worse culture. But let's hope that'll change.

Posted by: formidable doer of the nasty at January 11, 2014 10:01 AM

Posted by: SocketSite at April 9, 2014 1:20 PM

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