Hines Development, which is most known for the Salesforce Tower, was also present at the economic conference and gave a speech.
In a recent report on Oakland’s post-COVID economy, economists and at least one developer are bullish about the city’s downtown, which they anticipate will reappear in 2021 and beyond.
The primary findings of the report were presented at an economic summit hosted by the Oakland Metropolitan Chamber of Commerce on Thursday, and the founder of Beacon Economics, Christopher Thornberg, expressed optimism that downtown office space will be a significant driver of the region’s economic revival.
“The pandemic isn’t putting an end to downtowns; on the contrary, it’s making them more vibrant,” he observed. “Downtowns will be more essential than they have ever been,” says the author.
He asserts that businesses profit from being in close proximity to their vendors, clients, and employees in the city center, and that a downtown office tower carries a level of prestige that cannot be replicated in other parts of the country. Businesses have, on the other hand, been cautious to locate in downtown regions due to the high cost of real estate and the arduous commute that residents endure.
Because of the outbreak and the accompanying transition to working from home, it’s possible that things have changed.
“Rents decrease when everyone who already resides in downtown reduces their overall footprint. “Can you tell me what that means?” he inquired. “It means it’s less expensive,” says the author. Due to the fact that they are working from home one or two days a week, there are fewer workers driving into downtown, resulting in decreased commute costs.
At least one well-known developer looks to be on board with the initiative. A 622-foot-tall office tower at 415 20th Street in downtown Oakland is being built by Hines Development, the same company that developed the Salesforce Structure across the water. The tower will likely be the city’s highest skyscraper when completed.
At the outset of his presentation, Senior Managing Director Paul Paradis revealed to the assembled Zoom throng that the structure was an office building. In general, we expect that people will return to work, that there will be growth and demand, and that is our outlook on the matter.
Thornberg, the economist, noted a variety of data factors that indicated that Oakland’s office space was in good shape. When comparing the fourth quarter of 2020 to the previous year, the Oakland metropolitan division (which includes Alameda and Contra Costa counties) saw a 1.4 percent increase in office rents, but it is still significantly less expensive than San Jose and the San Francisco metro division (which includes San Mateo County).
According to the Oakland Bureau of Statistics, the fourth-quarter office vacancy rate in Oakland was 16.9 percent, up 1.7 percent from the previous year, and ranges between 11 percent in San Francisco and 19 percent in San Jose.
While downtown Oakland may be more appealing to businesses because of its lower rents, as Thornberg pointed out, the same features that make downtown Oakland more appealing to businesses may also be present in San Francisco and San Jose.
During this period, people will consider skipping Oakland and returning to San Francisco, according to the forecast. “It’s something you don’t want to happen,” he said passionately. “Take advantage of the opportunity, grasp the moment, and convert downtown Oakland into the new competitive tech hub.”