Increase in Vacancy Continues
The Oakland Metropolitan Area’s office vacancy rate continued to increase in the third quarter of 2020, rising from 8.8 to 9.8 percent. Year-over-year the rate is up 3.7 percentage points from the 6.1 percent rate in the third quarter of 2019. Clearly a downturn is evident as COVID-19 has led to many employees working from home. Not all the news is negative, as touring activity has begun to return as companies formulate plans for adapting to a post COVID-19 world.
Net absorption in the third quarter was negative 33,786 square feet, however this figure was buoyed by the recently constructed 344,500 square foot Class A office building at 1100 Broadway that was 100 percent pre-leased prior to COVID-19 and delivered to replace when construction was completed. Without this building the third quarter’s net absorption would have been negative 378,286 square feet, a slight increase from the second quarter’s negative 374,386 net absorption total. The combined average asking rate across all classes of office space decreased by $0.04 to $4.53 per square foot per month full service (FS).
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