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San Francisco is one of America's most exuberant and rapidly-changing cities. Major projects like the Transbay Transit Center and 181 Fremont are quickly altering the streetscape and skyline of the west coast metropolis. Yet these exciting new developments, many of which are luxury housing projects, are fueling the perception that San Francisco is becoming a city for the wealthy. San Francisco is now the most expensive city in the United States to rent an apartment, and the lack of affordable housing is forcing youth to settle elsewhere. San Francisco's loss is becoming Oakland's gain, as startup companies and home purchasers are looking across the bay at more affordable alternatives.
San Francisco's South of Market (SoMa) neighbourhood is home to many successful internet and software companies, including Yelp, Uber, LinkedIn, Pinterest and IGN. But the cost of office space is pricing out tech startups in both SoMa and the rest of the city, much like the cost of housing. With these startups in need of options, developers Ridge Capital Investors and Contrarian Capital Management are hoping to replicate the SoMa ambiance in Oakland. They have purchased a downtown historic property at 1611 Telegraph Avenue and are currently in the process of renovating the building at a cost of $10 million. Its attractive brick and stone exterior, combined with a renewed and modern interior, could result in the creative workspaces that tech startups are looking for.
The structure was 60% occupied when it was purchased, which has now grown to 70% even before renovations are due to be completed in November. Rents have nearly doubled from $24 per square foot to over $40. According to CBRE, Class A office space costs about $38 per square foot in Oakland, compared to $65 in San Francisco. The developers have also purchased three buildings in Pleasanton, a town located about 25 miles east of Oakland. They plan to retrofit and convert them, again into usable and contemporary office spaces fit for emerging companies.
A seven-storey building in Oakland's Uptown neighbourhood was purchased by Lane Partners who are planning a $40 million update with the esteemed architects at Gensler. Although completion isn't expected until spring 2016, with tenants occupying the former Sears store the next year, Lane Partners has already received at least two offers for the entire space. To be called Uptown Station, the building includes a direct connection to the 19th Street BART station, which helps attract San Franciscans with an easy commute. At 40,000 square feet, the building provides one of the largest contiguous office spaces in the city.
As office space is bought and spruced up around Oakland, new residential development is providing workers with a place to live. The city's largest development is now underway as Brooklyn Basin began infrastructure work on the waterfront this summer. Over 3,000 housing units and 200,000 square feet of retail representing $1.5 billion is injecting new life into the downtown. Environmental remediation has been conducted and the first of five residential towers is scheduled to break ground next year. The development will also include a significant affordable housing contribution in the form of 465 units. Brooklyn Basin covers 62 acres of land, 32 of which will be dedicated to parks.
Overlooking Oakland's Lake Merritt may soon be a 42-storey residential tower containing 370 units and five levels of underground parking. If built, Emerald Views would become the tallest building in the city, overtaking the 28-storey SOM-designed Ordway Building which opened in 1970. The tower calls for a cafe and publicly accessible observation deck, all built to LEED Gold standard.
A 37-storey tower by Real Estate Transformation Group and Gensler is due to bring green technology to downtown Oakland. 1143 Alice Street would contain 243 condominium units atop a four-storey parking structure built in 1927. Efficient curtainwall glazing, lighting, HVAC and water systems will reduce energy use and greenhouse gas emissions. The plan also includes a massive 14,000-square-foot solar panel array, regenerative elevators and a combined heat and power plant to create and reuse energy. If constructed, the tower would add a touch of sustainability to Oakland's growing core.
Finally, a Class A office building designed to LEED Platinum standard has obtained approvals to begin construction. The 20-storey tower will incorporate the existing historic Key System structure at 1100 Broadway and also include 9,810 square feet of retail. The project team includes developer SKS Investments and KMD Architects.
Although only a handful of tech companies have headquarters located in Oakland, including Ask.com and Pandora, the city is becoming an increasingly attractive investment alternative to busy and expensive San Francisco. As the downtowns of North American cities become more appealing to youth, many residential, office, and retail complexes should follow in their footsteps. A number of other projects are proposed for Oakland, which you can discuss in the Forum linked below, where you'll also find the dataBase files for the developments discussed in the article.
| Related Companies: | Gensler |
