Oakland Multifamily Investment Forecast
Apartment Performance Steady Through Health Crisis;
Buyers Take Advantage of Bay Area's Highest Cap Rates
Soft landing gives way to protracted recovery. The inability of a large percentage of East Bay employees to transition into remote work kept apartment vacancy relatively low throughout the downturn. Approximately 24 percent of the local jobs are in traditional office-using sectors, compared with 44 percent in San Francisco and 36 percent in San Jose. Workers in these fields were the most likely to leave the Bay Area. As a result, vacancy had returned to pre-recession levels in the third quarter of 2021. Stability is anticipated this year, though competition from across the Bay Bridge will remain a challenge in the Class A sector. The impetus for a stronger recovery that leads to robust rent growth hinges on the pace of fundamental improvement throughout the Bay Area. As the tech giants recall their employees and units vacated during the early stages of the health crisis are reoccupied, more renters will consider East Bay options. The other major group of incoming tenants are cost-conscious workers. The average rent in the market is more than $300 per month lower than the rest of the Bay Area.