Who doesn’t know Oakland is going through a Renaissance? A year ago Downtown (and Uptown) Oakland was a mixed bag of A to C office uses. It still is, but something has changed in the well-located C office market: assets close to BART are attracting attention from B office users, tech transplants from San Francisco, and developers. And they are attracting B office prices.
Call me for details on the 25,000 sq ft building now in contract that fits this model. Three blocks away a 23,000 sq ft building that sold for $2.2m last year is offered now at $3.5. That’s not the end of that sequence, however. That $3.5m building should be tradable above $4.6m to the right buyer if this market holds up. Will it?
The Multifamily and Office Markets in San Francisco are so far beyond Oakland in pricing that they are lending not only support but growing momentum to the Oakland market. The Oakland market is entering a consolidation phase in which property values begin to be based upon highest and best use as opposed to current. Current income doesn’t hurt, but the buyer is hot to take the property to the higher use. We have seen this in San Francisco and Peninsula markets for some time. Downtown Oakland is newer to the fold and thus still a richer opportunity for both Buyers and Sellers.