SAN RAMON, CA—The East Bay/Oakland office market received a big boost from big tech in the fourth quarter of 2018, according to Cushman & Wakefield’s latest market report. Meanwhile, vacancy returned to single digits at 9.7% to close 2018.
“The East Bay/Oakland office market achieved more than 1 million square feet of gross absorption during the quarter which made up 40% of the market’s total 2.5 million square feet of gross activity in 2018,” said Molly Herrick, Cushman & Wakefield’s market director for the East Bay. “Occupancy levels were also improved in the fourth quarter with 116,000 square feet of positive net absorption, bringing the market to 130,200 square feet of overall annual growth. Over just the past five years, the East Bay/Oakland office market has seen robust occupancy growth totaling approximately 2.2 million square feet.”
Asking rents continued increasing in the East Bay/Oakland office market in the fourth quarter, closing 2018 at an average of $3.74 per square foot on a monthly full-service basis, up 14.4% from year-end 2017, according to the Cushman & Wakefield report.
Carrying that occupancy growth forward into the first quarter, nine new office leases have been inked recently at Bishop Ranch. The leased space totals 212,355 square feet, with the majority of transactions featuring companies moving from other Bay Area markets and many headquarter relocations.
“Companies in a wide range of industries across the Bay Area are looking for a best-in-class work environment that enhances the lives of their employees, and we’re proud to be able to offer that at Bishop Ranch,” Alexander Mehran Jr., president and chief operating officer of Sunset Development Company, owner of Bishop Ranch, tells GlobeSt.com.
The recently signed leases include a global medical device company, the Cooper Companies, leasing 49,315 square feet and moving its headquarters from Pleasanton, CA. Franklin Templeton, a global investment management organization, leased 43,549 square feet.
ARC, a provider of technology and document solutions, leased 23,328 square feet. TRI Pointe Homes, a builder of single-family homes and condominiums throughout Northern California, leased 18,991 square feet. Foster Farms, a West Coast poultry company, leased 18,938 square feet.
Mason-McDuffie Mortgage Corporation, a Bay Area residential lender, leased 17,130 square feet. GCL, a solar enterprise, has leased 16,486 square feet.
Lennar, a home construction and real estate company, has expanded its lease to 13,138 square feet. Finally, Konica Minolta Business Solutions USA, a technology company, leased 11,480 square feet.
“We’re confident our new location at Bishop Ranch will allow us to build a deeper rapport and presence with the San Ramon community, while fostering collaboration and fueling the continued growth of our company,” said Albert G. White III, president and chief executive officer of the Cooper Companies.
Bishop Ranch is home to more than 600 companies in excess of 30 industries, including many Fortune 500 companies. Tenants include AT&T, Chevron, IBM, Rodan + Fields, PG&E, GE Digital, Robert Half, SAP, BlackBerry, Bank of the West, Toyota and Berkshire Hathaway. Bishop Ranch offers flexibility for changing company demands and its tenants occupy spaces from 150 square feet to more than 1 million square feet.
“The decision to relocate our headquarters to Bishop Ranch was a logical step in our growth strategy,” said Suri Suriyakumar, chief executive officer of ARC. “Our move was driven by the desire to combine our Northern California staff and the need for a more collaborative environment. Bishop Ranch not only had the space we needed, but it also featured amenities that would significantly enhance the work environment for our employees. We’ve built out a tremendously practical, team-oriented and beautiful space at BR15, and we’re looking forward to doing great work here.”
Employees at Bishop Ranch have access to a wide range of on-site services, including transportation programs, professional seminars and networking opportunities, health and wellness activities, lakeside dining and boats, bocce ball and volleyball courts, a coffee and wine bar, gourmet food trucks, cafes and a weekly farmers market. Roundhouse Market and Conference Center features 50,000 square feet of flexible meeting and conference room space. Additionally, the Dorris-Eaton School provides kindergarten-to-eighth grade education and Bright Horizons offers childcare and early education.
Finally, the newly opened City Center Bishop Ranch brings an urban amenity to the campus with a collection of dining, retail and entertainment experiences. A 10-screen theater and Equinox anchor the project. Notable restaurants include the Slanted Door, Charles Phan’s Vietnamese restaurant, and Fieldwork Brewing Company, the East Bay-based craft brewery.
The Cushman & Wakefield report also indicates the Oakland-Hayward-Berkeley metro division recorded 1.8% growth year-over-year, bringing employment to slightly more than 1.19 million, per data compiled from the Bureau of Labor Statistics.
“Unemployment fell 40 basis points year-over-year to 3%. Job growth has slowed in recent years as the region nears full employment, while a housing shortage has presented an obstacle to labor force growth,” Herrick said.
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