Oakland’s Office Market Post-Pandemic: Uptown Vs Downtown

Uptown Oakland’s commercial recovery is outpacing downtown’s, spurred on by desirable outdoor amenities and increased foot traffic, as well as an emphasis on residential development during the previous cycle, according to agents and owners.

“I think you just have a little bit better of an urban fabric here,” said Isaac Abid, founder of Lakeside Group, who owns properties Uptown and Downtown. “At a time when daytime traffic is down from where it used to be, the more you can have high density and mixed use concentrated, the better your chances are for having more pedestrian activity and having people feel safer.”

There’s no clear location where Downtown ends and Uptown begins, he said. Avison Young generally considers 15th Street to be the dividing line, according to firm data analyst Howard Huang, with anything below it being Downtown. The commercial firm didn’t analyze the Uptown versus Downtown markets until the pandemic, when it became clear that Downtown’s shortage of appealing outdoor offerings and subsequent drop in foot traffic were going to be issues for its recovery, Huang said.

Avison Young’s first-quarter office report reveals that both occupancy rates and foot traffic in the Uptown/Lake Merritt area are stronger than the Downtown/City Center market, with Uptown showing a 13 percent higher visitation rate in March 2025 and a first-quarter vacancy rate that is nearly half of Downtown’s 38.2 percent figure.

Uptown also netted the biggest new direct lease in Oakland since the pandemic this spring, with the Veteran’s Administration signing on for nearly 80,000 square feet in the old Kaiser offices that sold to developer Behring Companies last year for just $20 per square foot.

The VA is just the kind of government tenant that Mark McGranahan, a principal at Avison Young in the San Francisco office, would not have been surprised to see Downtown, where he said bigger, more institutional tenants are still drawn to the “high-rise business park” atmosphere in City Center.

But stronger amenities, a perception of better public safety and increased emphasis on the outdoors are all pushing “younger, more entrepreneurial” companies closer to Lake Merritt, the Oakland resident said, and they make up the vast majority of the firms in the office market today.

Uptown’s quicker recovery makes a lot of sense to Behring Companies CEO Colin Behring, given the newer vintage of the properties there. Downtown was already built out when the last big wave of investment came to Oakland a decade ago, he said, while Uptown had low-rise auto garages that were easily torn down and replaced with glossy, glass towers that only opened their doors in the last few years.

“Eventually you’ve got 10 new towers that are all mostly Uptown and as Uptown started to rejuvenate the area, having these new apartment buildings and new retail on the first floors, naturally, it just got really nice,” he said.

Old-school but still vital Uptown culture spots like the Paramount and Fox theaters are another assist to creating the live-work-play vibe Behring is looking to shepherd at his brand-new 1900 Broadway high-rise, which has apartments, furnished “hacker house” set ups, co-working and event spaces.

“If you were going to do something as aggressive as this program, this is the place to do it,” he said. “This is the only place you could have pioneered with the wind in your sails.”

No short-term fix for downtown

The things that would benefit Downtown — like growth in government and institutional companies — are unlikely to happen in the short term, McGranahan said, which means a longer-term reinvention is required.

“There’s no short-term fix for City Center,” he said. “I think it’s going to continue to struggle and bump along the bottom until there’s a change in the economy.”

He also said Downtown hasn’t been able to offer the same discounted rents that new Uptown buyers with a much lower basis like Behring and Abid are able to offer since so many buildings in City Center were sold just before COVID. Once Downtown loans start hitting their maturity dates, default and new owners take over, they’ll be able to compete again, he predicted. While the rents on particular deals have not been shared, direct asking rents Uptown are $4.32 per square foot per month, while Downtown is $4.52, according to Avison Young.

“The buildings have to essentially go bankrupt. They need new capital. They need a new lender and then they can reboot and be competitive,” he said.

Abid said his low basis and ability to put money into 180 Grand, as well as its position right on the lake, is part of what has netted him 12 leases since buying the building at a massive discount last fall. It also renewed its biggest tenant, credit card issuing company Marqeta, for “a few more years,” he said.

He isn’t sure if a wave of distress is on the horizon Downtown, but said that whether borrowers and lenders arrange a workout or the buildings change hands, “you’ve got to have an ability to invest capital in office and that, I think, will happen in the next year or so.”

“The first mover advantage of 180 Grand to drop rents and meet the market, I don’t take that as a permanent state of being,” he said.

Even with lower rents, Downtown will be hard-pressed to compete with the open-air amenities of Uptown, McGranahan said, which is what tenants across a wide range of sectors are looking for today. He compared City Center to the indoor malls that have struggled since the pandemic versus outdoor “lifestyle” shopping centers that have been more attractive to retailers.

“I can either meet you downstairs in my sterile, cold lobby, or I could walk to the lake and watch people pushing their kids around with their strollers,” he said, imagining a coffee meet-up between colleagues or clients. The lakeside stroll is “probably going to win every single day,” he said.

The desire to be outdoors has also been a boon to Jack London Square, which is a much smaller office market, but has a lower office availability rate at 16.3 percent, with only about 11 percent availability in Class A, according to Avison Young first-quarter data. Uptown Class A availability is at just over 21 percent while Downtown Class A is nearly 39 percent available.

Outside of Oakland, Emeryville has also been pulling in tenants near the “very outdoors” Fourth Street Mall, McGranahan said, and others are even braving the tunnel traffic to get the island vibes in Alameda. “Nerdy-type” companies like the academic environment in Berkeley, though its smaller buildings can’t house companies looking for a lot of square footage, McGranahan said.

“You can’t be 50,000 square feet in Downtown Berkeley,” he said. “You could do that in Oakland, whether it’s City Center or Uptown.”