The would-be Kaiser Center addition is the biggest office proposal in Oakland but it is by no means in the front of the line for tenants. Brandywine Realty Trust is just completing a nine-story, 215,000-sf building at 2100 Franklin St. that will be connected to 2101 Webster St. by an atrium; Shorenstein is close to construction for a 23-story, 500,000-sf building at 601 City Center; and SKS Investments last month received development entitlements for a 20-story, 300,000-sf Downtown office tower at 1100 Broadway.

"Brandywine moved forward (without a tenant) because the property came with its acquisition of 2101 Webster, was ready for construction and the market was a little hotter than it was today; they started construction two years ago," CB Richard Ellis' Oakland-based office specialist Sid Ewing tells GlobeSt.com. "I will be surprised if anybody else comes out of ground without a tenant."SKS, a San Francisco-based investor, advisor, manager and developer is of like mind. Company officials say the company definitely won't move forward on its project without an anchor tenant given the uncertain nature of the economy at the moment. Shorenstein, which is partnering with MetLife Real Estate Investments, is being more adventurous, saying it will develop its property with or without tenants and will break ground in September. Then again, it would be the first one to make such claims and then pull back at the last minute.

Part of the problem is lease rates. Despite Brandywine's project, Ewing says lease rates are not high enough in the Oakland CBD to warrant new construction. With the best space in existing class A buildings leasing for between $2.65- and $2.85 per sf (full service), tenants may be reluctant to pay $3.25 – to $3.50 per sf for space at Brandywine's 2100 Franklin. An executive at Brandywine was not immediately available Tuesday afternoon for comment.

"I'd say [2100 Franklin] probably is going to remain vacant through 2008," says one longtime local broker who requested anonymity. "If a 200,000-sf tenant enters the market they may be able to make something happen but for [25,000- to 100,000-sf] tenants there are other options in the market that I would expect to be leased up first" because of the price difference.

The current direct vacancy rate in the 6.7 million-sf Oakland CBD class A market is 10.7%, with the 3.8 million-sf Lake Merritt area coming in at 12.6% vacancy, thanks in large part to Brandywine's vacant building, and the 2.8 million-sf City Center area coming in at 8%, according to CB Richard Ellis. Sublease space adds very little to the percentages.