There’s a Bright Spot in Oakland’s Office Market

Signs of momentum emerge in Q1 leasing activity

After years of lagging behind its Bay Area neighbors, Oakland’s office market is showing some promising signs of life. Leasing activity rose significantly in Q1 2025, offering a potential early signal of recovery for the city’s post-pandemic office landscape.

According to CBRE’s latest figures, leasing activity in Oakland climbed nearly 13% compared to Q4 2024. Even more telling: pending lease deals outnumber those currently active, a signal that tenant interest may be gaining ground.

The biggest deal of the quarter? The U.S. Department of Veterans Affairs signed a 57,000-square-foot lease at 1950 Franklin Street — not only the largest office lease in Oakland since 2021, but also the first major tenant commitment at the property since it was acquired by Behring Cos. in September. The building had remained largely vacant since the early days of the pandemic.

Other notable Q1 transactions include:

• Goldfarb & Lipman, a Bay Area law firm, leasing 16,000 square feet at 1330 Clay Street
• E.l.f. Beauty doubling its Oakland footprint with a 27,831-square-foot lease at 601 12th Street, which was finalized late last year

Despite this leasing momentum, the return-to-office mandates for Oakland’s city employees — expected to bring increased foot traffic downtown — have yet to take full effect. Originally planned for April 7, the directive to return to City Hall four days per week has now been pushed to June 2, pending final adjustments to telecommuting policies in collaboration with union partners.

Vacancy and Absorption Trends

Oakland’s central business district (CBD) vacancy remains elevated, at 34.5% in Q1 — a slight improvement over the 34.8% reported in the prior quarter. Net absorption dipped slightly, with -14,500 square feet in Q1 compared to 48,534 square feet of positive absorption in Q4 2024.

New leases represented 69% of total leasing activity this quarter, accounting for 65% of leased square footage, while renewals made up 31% of deals and 35% of leased space.

Looking at the broader market — spanning from Richmond to San Leandro — the numbers were even more encouraging. The region saw 318,824 square feet of total leasing activity in Q1, marking a 30.3% increase from the previous quarter. That said, total vacancy across this wider Oakland market still sits at 22.9%.

Sales Activity and Investment Interest

While leasing is showing signs of life, sales remain relatively muted. Only two notable transactions were recorded in Q1:

• Frontline Realty Capital purchased 1440 Broadway for $5.5 million
• Manfred Edward Simson acquired 1220–1240 Broadway, a 50,000-square-foot office building, for $3.17 million

That said, investor interest appears to be building. CBRE reports an influx of properties hitting the market — and more listings are expected to follow.

Among them: Newmark brought 2001 Broadway and 1300 Broadway to market earlier this year. The pair, originally acquired in 2016 by Goldman Sachs and HP Investors for $19.5 million and $26.5 million, respectively, now represent potential opportunities amid shifting market dynamics.

Adding to the evolving ownership landscape, last August HPI announced that Lakeside Group, an Oakland-based firm, would assume control of HPI’s Northern California portfolio as part of a broader restructuring. While HPI will remain an investor for now, the firm has signaled plans to fully exit in the near future.