Office Vacancy Hits 37%, At Same Time Grid Lock Feared

The overall office vacancy rate for the I-680 Corridor is around 20%, with Class A Downtown Walnut Creek at 25%, the Pleasant Hill/Walnut Creek Bart region at 30%, while smaller markets like Alamo/Danville are closer to 10%. Cushman Wakefield just reported “The Class A office vacancy rate in Oakland’s core business district reached a historic high of nearly 37% in the third quarter.” Major companies are giving up space, putting space on the sublease market, allowing their workforce to work remotely from anywhere, not committing to large Eastbay blocks of office space, relocating to other states where taxes and labor is much lower, and in general being absent from the office leasing market.  The folks who are actually going to the office are for the most part driving, including many who in the past may have taken public  transportation.  BART ridership, as an example, is currently 26% of its pre-pandemic level. Employers seem to be targeting Tuesdays, Wednesdays and Thursdays as the days hybrid workers come to the office. Jelly Obrabowicz with Bay Area Council stated “We are at a pivotal moment for Bay Area transportation – if more and more people continue to drive by car to get around, as we are seeing them do now, once we reach the new post-pandemic norm for in-office work, Bay Area traffic will hit levels we’ve never seen before.” Oh great, that will really motivate folks to come back to the office! And those poor retailers…either way, with few back at work they will suffer, and if workers only come three versus five days a week, their landlords still want them to pay for the entire weeks rent…having weekends dark when you cater to office workers was bad enough…