Retail vacancy is a hard thing to really track with leases expiring, stores suddenly closing, new “pop up” stores and other variables severely affecting just how many open places there are.
Neighboring San Francisco is currently around a 6% retail vacancy. But most people living there will report the same phenomenon as Oakland, with a lot more open stores than 6%. In 2015, Oakland had under a 3% retail vacancy, and in 2019, had only 2%. Today it is sitting at 7%.
Of course, this isn’t bad as office vacancy. Right now Oakland is at about 20%, with San Francisco approaching 37%. The excuses for both retail and office rates are the same too: Economic uncertainty, high inflation, rising insurance costs, more people working from home, the rise of AI and automation, the continued rise of e-commerce, the rising crime rate, high rental costs, and businesses still adjusting to a post-COVID climate have all been named as factors
But when going around Oakland, it seemed higher than 7%. All of those above factors have to create an above 7% retail vacancy rate. So let’s dive in.
“It is way above 7%,” said a Bay Area real estate advisor “Jan” to the Globe on Thursday, joining this reporter on a walk around the city. “It is way emptier than that. So, some places just take their rental property off the market for awhile for a variety of reasons. That’s why many are painted over or have slick artwork covering them. And this is a common tactic. A lot of cities actually commission artists to paint over abandoned or for lease storefronts, and malls and even airports use this to cover up untaken places.”
“But in Oakland it is especially notable because it is everywhere. The more expensive places have those clear windows with the for lease signs in them, but the idea still holds.”
When asked on which street to begin on, as to not “cherry pick” the best streets to have the most vacancies, Jan laughed.
“Just pick a street here and we’ll see vacancies within a block.”
