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Newmark Knight and Frank (NKF) researchers throughout the country recently contributed to a study published by the company, with the goal of examining popular beliefs about commercial real estate and determining their validity.

Among the misconceptions they address is the belief that suburban office locations have become less desirable, and that companies have found that they must be located closer to the urban core in order to attract and retain young talent.

NKF researchers dispel that myth, noting that “Mixed-use, suburban environments that can replicate [urban environments’] ease of access and mobility remain popular with today’s office tenants,” especially those in the tech industry.

Since 2013, absorption in suburban office markets has outpaced absorption in central business districts in the 56 major markets tracked by NKF, according to the study. They note the example of the Denver metro area, where the Southeast Suburban submarket led the market for absorption in the period from Q1 2010 to Q1 2018, and is home to seven of the nine Fortune 500 companies located in Colorado. Absorption has been driven largely by corporate tenants’ vigorous growth.

Download and read the full report at www.ngkf.com

The City of Oakland has proposed the redevelopment of the downtown Clay Street Garage, which has been vacant since 2016, into an office complex, reports the East Bay Times.

The building, which was closed due to seismic safety issues, should be demolished and the site used for an office building, the city’s transportation and economic and workforce development department officials recommended in a March report.

A city-commissioned a study to determine the benefit of demolishing and rebuilding the structure as a mixed-use development found the city could make about $4.3 million from developing the site into an office complex.

Demand for office space in downtown Oakland has surged as increasing San Francisco office rents have led companies to relocate to the East Bay.

Oakland’s downtown office market is the tightest in the nation, with lower office vacancy levels than business centers like Manhattan and Boston, according to CBRE’s Q1 2018 report.

Housing activists, however, have advocated the space be developed as affordable housing, given Oakland’s rising rents. The City Council has directed staff to explore the feasibility of building affordable or market-rate housing at the site.

Read more at www.eastbaytimes.com

CBRE reports high demand for creative buildouts in Oakland as the market continues to tighten. The commercial realty brokerage’s most recent Oakland Office Marketview notes quarter-over-quarter rent growth for Class B space (4.2%) easily outpaced growth for Class A assets (1.6%), and explains “the overall look and feel” of Class B creative product makes it “truly a legitimate alternative to premium rents for tenants seeking exciting and desirable space.”

Demand for office space in downtown Oakland has surged as increasing San Francisco office rents have led companies to relocate — many to the East Bay. The office market in downtown Oakland is the tightest in the nation, with lower office vacancy levels than even those in business centers such as Manhattan and Boston.

“Downtown Oakland offices have seen expansion from San Francisco, not just in tech, but primarily in non-tech companies that want to stay in the Bay Area but find the rents in San Francisco too high,” Lexi Russell, a senior research analyst for CBRE in Northern California, told the Mercury-News. “Companies are finding it beneficial to relocate to Oakland because so many of their employees live in the East Bay and the rents are less expensive.”

 

Download and read the full Marketview report at www.cbre.us

More than 3.18 million square feet of office space has been built in the past five years or is currently under construction in Denver, according to the Downtown Denver Partnership. This marks a record high for the city, which celebrated the midpoint of its 20-year plan for growth last year.

The Downtown Area Plan is intended to create a “livable, healthy and economically powerful downtown,” and the city has seen tangible results. Significantly improved transit, increased retail offerings, and a downtown residential community that has more than doubled can all be credited to the plan in action, writes Tami Door, president and CEO of the Downtown Denver Partnership, in Colorado Real Estate Journal article.

The increase in office construction has not resulted in high or reduced lease rates, however, as one might expect in the face of significantly increased supply. Instead, Door writes, the downtown market is witnessing stable vacancy at 11.6% and rising lease rates at an average of $33.09 per square foot.

Among the sources of increased demand, Door notes the presence of more than 700 tech startups in downtown Denver, who collectively employ nearly 5,000 workers. The large volume of startups raised $500 million in venture capital during 2017 alone.

Read the full article at www.crej.com.