The East Bay’s office market recorded a slowdown in leasing and sales activity as it closed out the first half of 2022. For the deals that have transacted in Q2, overall rental rates recorded a 3.8% quarterly increase. As a result of a quiet quarter in leasing, vacancy increased 2.8%, quarter-over-quarter. Tidewater Capital acquired 7000 Bancroft, a 550,426 square foot office building as the only large sale transaction in the quarter. Leasing activity recorded a slowdown in deal volume and velocity, recording a 42.4% reduction in average transaction size quarter-over-quarter. The largest deal of the quarter goes to Sound Agriculture, a laboratory lease, taking 33,352 square feet in Emeryville. Venture Capital recorded a slowdown and investors have changed their funding strategies, favoring later-stage funded companies over early-stage funded companies.
Looking ahead, life science will continue to bolster the quiet office market in the East Bay, helping to prop up the market until return-to-office strategies materialize. Expect in the short-term: vacancy rate increases, negative net absorption, and a plateau in rental rates.
Looking ahead, life science will continue to bolster the quiet office market in the East Bay, helping to prop up the market until return-to-office strategies materialize. Expect in the short-term: vacancy rate increases, negative net absorption, and a plateau in rental rates.