Photo by Sergio Ruiz, via Citylab
“Is Oakland the next Brooklyn?” asked Fortune magazine in 2014, in yet another iteration of the hackneyed formula used to measure the growth and development of scrappy, smaller cities. The answer came as something as a refreshing variation on the theme: “It’d rather not be.”
But undoubtedly, within the last few years, Oakland has been experiencing its own “modern moment” in its own way, attracting hip businesses by the dozen. In 2016, Forbes placed Oakland at #13 on its list of America’s fasting-growing cities. The usual concerns about displacement and equity that come with rapid growth, in Brooklyn and elsewhere, apply here, with questions about the scarcity of affordable housing, and of residential real estate more generally.
What does all this growth mean for commercial real estate? “Between 2000 and 2015,” notes Citylab, “only two commercial office buildings… were built in Oakland. In the same time period, Oakland’s population soared by 8,000.” Then, in just a few short years, the city added another 7,000 or so residents, soaring to its current population of approximately 426,000 as of 2017.
“Oakland is quickly reaching capacity,” warned Citylab. In 2016, the San Francisco Business Times reported that office rents had jumped to an all-time high: “As dozens of tenants have migrated to the city from San Francisco, local businesses have expanded and almost no new office construction has occurred in the last eight years.”
The situation is changing, slowly, with some long-overdue construction projects creating 20 new towers Uptown and in Downtown Oakland in the coming years. Much of this new construction will house residential units, though two new office complexes are in the works: a large new office tower at 1100 Broadway, next to (and incorporating) the Key System building, and a mixed-use project at 2401 Broadway.
“The East Bay’s largest city,” writes The Mercury News, “is poised for an influx of companies and other organizations.” These will include an increase in start-ups and established companies alike trickling down from San Francisco as the city across the Bay is projected to hit one million people by 2030.
Will the current rate of commercial construction be able to keep pace with demand? That remains to be seen. As developers seek to maximize space by building above designated height limits, residents push for compromises on affordable or low-cost housing, as well as space for retail and grocery stores, bike and car parking, and other uses, to avoid being crowded out by office buildings.
These battles will intensify as the city expands—if the recent histories of “next Brooklyn” cities are any indication. And reasonably affordable, accessible office space may soon become a relative rarity in a downtown area that just two years ago, Citylab described as “strangely empty.”