"Although the overall Bay Area office market softened considerably in the second half of the year, our activity in Oakland was strong right through the fourth quarter," said Thomas G. Irish, President of Transpacific Development Company, Lake Merritt's developer and manager. "We did not witness much of a fall-off in either demand or rates."

Lake Merritt Plaza leased 131,023 square feet of space in new and renewal office leases in 2001 -- more than 25,000 sf in the final quarter of the year. The deals were closed at an average annual effective rate in excess of $41.50 per sf, fully-serviced.

Irish says that although Oakland historically has experienced lower Class A office rental rates than San Francisco, the Silicon Valley and the Peninsula, that gap appears to have closed in recent months. "Although Oakland's office rents did not soar like those in other Bay Area markets, they increased significantly in 2000 and 2001, and have not fallen back as sharply," he says. "Oakland did not add as much new office product as other major markets did and was not as vulnerable to the high-tech fall-out.