By Jon Peterson
The commercial real estate market in the city of Oakland had quite a bit of momentum prior the COVID-19 pandemic, and experts wondered how the city would fare during these trying months. One company that helped revitalize San Francisco following the last recession was Twitter, and it made its home in the city’s Mid-Market submarket. However, this company is now looking to expand its footprint across the Bay Area in Oakland, and it’s a move that would in many ways enhance the city’s appeal further.
According to multiple sources aware of the social media company’s activities, San Francisco-based Twitter has set an office space requirement for the city of Oakland in the range of 50,000 to 80,000 square feet. There is no set timetable when the company would like to fill this space requirement.
A company representative of Twitter stated to The Registry in an email that the company would decline to comment at this time. Cresa, through its San Francisco office at 260 California Street, represents Twitter in its search for new office space. It had no comment when contacted for this story.
Should the office space be filled by Twitter, it would be a definite shot in the arm for Oakland. The office market in town was encouraged when Square decided to take over the 397,000-square-foot lease in Uptown Station from Uber. However, since that time none of the really big technology-based office users made a splash into the Oakland office market.
There should be plenty of room for Twitter to find space in the Oakland market. Event with PG&E’s planned move to Oakland in phases starting next year, the vacancy in the overall Oakland market hovers around 13 percent.
Twitter still has a significant amount of space that it leases in San Francisco. Its San Francisco headquarters totals around 800,000 square feet across two buildings in a property called Market Square in the Mid-Market part of the city. The tenant last September listed for sublease nearly 105,000 square feet in one of the building called 1TENth, which is adjacent to the headquarters operation.
The Market Square property is owned by primarily by J.P. Morgan Asset Management, and Shorenstein has maintained a two percent interest in the building since its recapitalization in 2015.
The space requirements for Twitter are still up and in the air. The company had announced in May 2020 that it would allow its employees to work away from the office on a permanent basis. In this regard, the company was one of leaders to allow full flexibility in perpetuity.
The gap in office rental rates in Oakland compared to San Francisco is projected to narrow in the future, according to sources familiar with the market. Oakland boasts rents approximately 20 percent lower than its counterpart across the Bay, but they could fall to the 10 percent range in the future as more office tenants consider the Oakland market.