Industrial demand continues to grow, and developers are having a hard time keeping up. In Oakland, there was 2.3 million square feet of industrial completions last year, roughly half of the completions in 2020, according to research from Marcus & Millichap. The completions were enough to increase the industrial supply by 1%, but not enough to keep up with rising demand.

The report expects development activity to ease once again in 2022, even as demand continues to rise. In Oakland, this demand will stem from major tech companies welcoming employees back to the office, and therefore back into the city. According to the report, these employees are ferocious consumers of delivery services, generating a need for warehouse and distribution space.

Supply chain challenges in San Pedro Bay port system could also fuel more need for warehousing space in Northern California. The Port of Oakland can accommodate ships waiting in line to unload off the coast of Southern California. The Port experienced a similar backlog early last year, but resolved the problem. While issues in the San Pedro Bay port system have eased, vessels continue to idle off of the coast. Re-routing to Oakland could help to ease congestion, but will create increased industrial demand.