Hines office tower would be tallest building in East Bay

Bet on Oakland hinges on employees returning to work near their home

Hines' Paul Paradis and a rendering of 415 E 20th Street in Oakland (Hines)
Hines' Paul Paradis and a rendering of 415 E 20th Street in Oakland (Hines)

Houston-based developer Hines plans to construct a 39-story office tower in Oakland – the tallest building in the East Bay.

“The location of our project is where the City of Oakland wants a high-density office,” Paul Paradis, senior managing director at Hines, told TRD. “Moreover, Oakland is starved for new Class A office space.”

The project proposes a 622-foot tall building with 850,000 square feet of space plus a garage for 262 cars. Almost 1,300 square feet would be reserved to ground-floor shops and restaurants.

The rooftop would be two stories and feature an open-air, landscaped deck. If open to the public, it would offer the highest observation deck in the Bay Area.

The development at 415 East 20th Street received approval from the planning commission in May last year and Hines filed demolition permits for the four-story office building currently at the location last month.

According to Paradis, employees want to work closer to home, and with half of the Bay Area’s employees living in the East Bay, Oakland becomes a desirable location for the project. The location on 20th Street is a block away from the 19th Street BART Station, which he believes would appeal to employees.

“The Oakland office market has matured with the combination of over 10,000 residential units, and companies are moving to Oakland to be closer to the large East Bay labor pool,” he said.

Oakland’s office market has yet to see a recovery from the pandemic. Vacancy in the city center submarket reached nearly 32 percent in the third quarter, up 4 percent year-to-date, with Class A buildings having an even higher vacancy at 37 percent. That equates to more than 2 million square feet of empty office space. The higher vacancy rate for Class A buildings is at odds with recent trends as companies look for high-quality space that offers amenities and a better employee experience in hopes to lure workers back to the office.

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“We are definitely seeing a flight to quality in today’s market and the top-tier buildings are garnering most of the tenant interest,” Ryan Hattersley from Cushman and Wakefield said. “Companies are realizing that if they want to get their people back to the office, their office needs to be a great place to work – as good, if not better, than home.”

With this in mind, Hines will include amenities to lure employees to the office. Along with the rooftop deck, the building will feature a ground floor lobby with a coffee shop, bike parking with showers, and a sixth-floor outdoor park.

Paradis attributed the high vacancy for quality space in Oakland to one large building, 601 City Center. The property has a 50 percent vacancy rate for 600,000 square feet of available space.

Recent leases by Square and PG&E give Hines confidence that the market will have a strong recovery.

“Oakland net absorption has suffered from a lack of new Class A office product; as such, Hines is confident that coming out of the pandemic having the best-in-class office building will make it a highly attractive building to lease,” Paradis said.

While this would be the tallest building in the East Bay, it is not the largest Bay Area project Hines is working on. The company is developing a skyscraper more than 1,000 feet tall in San Francisco that would be the second-tallest building in the city. It would have been the tallest, but the city required Hines to shorten it to balance the skyline.

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