A Significant Change
The overall Oakland Metropolitan office market’s vacancy rate increased from 7.0 to 7.6 percent in the first quarter of 2020. Given that the shelter-in-place orders were only issued in the last two weeks of the first quarter, COVID-19 has had limited impact on first quarter statistics; the impact is anticipated to be recognized in the second quarter. Activity, while declining, has not come to a halt with some transactions being finalized and overall deal velocity declining. Total leasing activity in the first quarter was 254,686 square feet, nearly on par with the 267,233 square feet in the prior quarter. However, net absorption was negative 216,434 square feet in the first quarter, a significant change from last quarter’s positive 252,129 square feet of net absorption. After five consecutive quarters of rent growth, overall office asking rents fell slightly to $4.59 per square foot per month full-service (FS) compared to $4.63 last quarter, but are still up $0.47 from Q1 2019.
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