Oakland’s industrial market not only outpaced the rest of the Bay Area, but all of Northern California, according to a report by Colliers.
The Oakland market includes the inner East Bay from Richhmond to Union City, along the I-80 and I-880 corridors.
Oakland had $2.76 billion of industrial sales in 2022, which translated to $273 per square foot. That represents a 34 percent increase year-over-year. Prices also increased by 23 percent from the previous year.
The East Bay city led all other Northern California cities in both metrics with Sacramento placing second in total sales volume ($883 million) and Pleasanton in price per square foot ($189). THe Solano and Napa counties region had the second-largest sales volume in the Bay Area with $789 million.
Oakland vacancy was 2.9 percent for the year, which trailed only Solano and Napa Counties (0.9%) and Pleasanton (2.3%). Oakland had the highest asking rent for the year at $1.12. In the fourth quarter of last year, Oakland had four of the top 10 largest new leases with RK Logistics’ lease on Winton Avenue the largest at 237,000 square feet.
“The Oakland/East Bay industrial market continues to witness robust leasing activity with rents increasing as a result of overall low vacancy and limited new construction,” Greig Lagomarsino from Colliers said. “Tenant demand for new construction is strong and the result is pushing up rental rates on second-generation inventory.”
The Oakland market had 606,000 square feet of new supply in 2022, and four times that much under construction at 2.45 million square feet. Construction has slowed at the beginning of this year, but that should pick up as the year goes on.
“The debt markets have put several new projects on hold, but we expect activity to improve in the second half of the year,” Lagomarsino said. “We believe these trends will continue throughout the balance of the year.”
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