Changing of the Guard
While the Oakland and San Francisco office markets have performed extremely well with continued high rents and low vacancy, the North I-680 Corridor has recently surrendered more available square footage. Vacancy has increased to 14.5 percent, an increase of 3.4 percentage points over the year prior. With the gradual vacancy rate increase, we project a decrease in both asking and effective rental rates over the next two quarters.
Class A rents remain historically high in Downtown Walnut Creek, ranging from $3.50 - $4.95 per square foot but almost all leasing activity has been achieved below $4.00 per square foot; while Class B rents have increased to $2.75 - $3.25 per square foot. With the recent increase in vacancy, new owners are remeasuring to increase the building square footage rather than push proforma rents.
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