The biggest East Bay city is capturing the Bay Area glitter as businesses and residents make it their home.
THIS ARTICLE WAS PUBLISHED IN THE ‘Q’ – THE REGISTRY’S PRINT PUBLICATION – IN JULY 2015
By David Goll[dropcap]A[/dropcap]s retailers large and small gravitate toward Oakland, it’s beginning to stem the leakage of the estimated $1 billion in sales that flow out of the Bay Area’s third-largest city each year.
More than 900,000 square feet of commercial space—much of it retail—has recently been completed, is under construction or in the planning pipeline in the under-retailed city of more than 400,000 people.
Some of the new and redeveloped projects are retail only, but others are mixed-use developments combining residential units with office and retail space.
[quote]”The Oakland real estate community is very excited. People deserve good places to work, shop, and live; and we’re excited to be creating these spaces. Everything that’s happening is an affirmation that we are just getting our mojo back.” Mike Ghielmetti, president of Signature Development Group[/quote]
Contributing to this growth is the thousands of new housing units being built in the city as Oakland catches an eastward wave of renters, homebuyers, artists and business owners priced out of San Francisco.
“It is one of the major reasons,” said Keira Williams, a retail specialist in the city’s Economic and Workforce Development department, about the economic flight from San Francisco. “Rents are so much higher there. But others come here intentionally to be in Oakland. This is where they want to be.”
Williams also credited Oakland’s simpler and less-costly permitting process with encouraging development in the East Bay city.
The city’s sales tax revenue—from both brick-and-mortar and online sales—reflects the rebounding retail sector. In 2014, Oakland collected more than $49.8 million in sales tax revenue, up nearly 4 percent from the previous year’s total of just over $48 million. Williams said those figures represent a dramatic uptick from several years ago during the recession when annual sales tax revenues hovered around $40 million.
Largest of the planned projects is the 300,000-square-foot Shops at the Ridge, a redevelopment of the Rockridge Shopping Center at 51st and Broadway by Carlsbad-based developer Terramar Retail Centers and designed by Oakland-based JRDV Urban International. It will be anchored by a new 70,000-square-foot Safeway grocery, where an existing, smaller Safeway in the center will relocate. The renovation and expansion also will create rooftop parking lots, elevated walkways and second-level restaurants and cafés. The first phase of the project is scheduled for completion by late 2016.
Though other anchor tenants have yet to be announced for the project, Williams said an existing Chase bank on the outskirts of Rockridge Center will relocate to the middle of the redeveloped plaza. City officials are seeking to attract apparel, home merchandise and sporting goods stores, she said.
Because of projects like Shops at the Ridge, Solomon Ets-Hokin, senior vice president of the retail services group at real estate brokerage Colliers International in Oakland, said his business in the city has been revived. Though based in Oakland, Ets-Hokin said for many years, almost all of his leasing activities occurred in neighboring East Bay cities with healthier retail economies. That has changed.
“Oakland has been under-retailed, so we have a lot of pent-up demand,” Ets-Hokin said. “This city has a lot of retail potential and is very hot right now. It has an authentic urban feel that’s attractive to Millennials. You have companies employing Millennials, Internet and social media companies moving to Oakland. We are seeing an influx of retailers, including boutiques and great restaurants. There is a retail renaissance going on in this city.”
This retail resurgence is strongest in Oakland’s more affluent neighborhoods—such as the Rockridge district where the median annual household income of $116,000 more than doubles the citywide median of $52,000. More retail also is locating in the city’s revitalized downtown and Uptown areas, especially along the Broadway corridor where a number of mid-sized mixed-use projects will generate more than 1,000 new residential units and 76,500 square feet of retail space. Tenants will include local and national shops, dining and beverage venues, including Drake’s Brewing Co. from neighboring San Leandro, Phoenix-based natural and organic grocer Sprouts Farmers Market and CVS Pharmacy.
The same corridor, traditionally known as the city’s Auto Row, has also become home to the Hive, a redeveloped block featuring 104 apartments and 100,000 square feet of office and retail space with an eclectic mix of cafés and restaurants, clubs and art galleries that serve as a Millennial magnet. It also boasts several corporate headquarters, including that of its developer, Signature Development Group, which spent $50 million on the renovation.
Signature has become a huge player in Oakland’s revitalization, orchestrating the development of Brooklyn Basin, formerly known as the Oak to Ninth project. The $1.5 billion project will transform 65 acres of industrial land on the city’s waterfront into a city-within-a-city with 3,100 residential units, 200,000 square feet of office and retail space, 30 acres of parkland and a 200-boat marina. It’s expected to generate 10,000 jobs. Williams said there is not yet a specific proposal for retail at the Brooklyn Basin site, where initial grading for construction is now under way.
Mike Ghielmetti, Signature president, said, “The Oakland real estate community is very excited. People deserve good places to work, shop, and live; and we’re excited to be creating these spaces. Everything that’s happening is an affirmation that we are just getting our mojo back.”