SAN RAMON, CA—After the recent absorption of several San Francisco-based tenants, the Oakland, CA market joins the other supply-constrained markets of San Francisco, the Peninsula and Silicon Valley with rapidly escalating rental rates and few large block availabilities. As of now, there are no 200,000-square-foot blocks of available space in downtown Oakland and San Francisco will not deliver any 200,000-square-foot blocks until mid-2017.

In San Francisco, the class-A vacancy rate is 4.5% with an average asking rental rate of $5.81-per-square-foot-per-month, fully serviced. The third quarter ended with tenant demand at 6.3 million square feet with as many tenants having requirements greater than 50,000 square feet. The downtown Oakland market closed the third quarter with a class-A vacancy rate of 6.91% and an average asking rental rate of $3.47-per-square-foot-per-month fully serviced, and up to $4.00-per-square-foot-per-month fully serviced for prime vacant space, according to Newmark Cornish & Carey.

"UBERS's market-moving purchase of the Sears building in September highlighted the recent flight to the downtown Oakland market and now the I-680 Corridor markets are poised to absorb the migration," said Tom Fehr, a Newmark executive vice president and regional manager.