Oakland Industrial Market Report

Small-bay demand offsets big-box weakness. Oakland has posted negative net absorption of industrial space for the past two years, driving vacancy above 8.5 percent as of March, even amid moderate inventory growth. As e-commerce demand cooled and tenants downsized, interest in large-box space has faded, while demand for small-bay spaces near urban cores has held up. This national trend is especially evident in Oakland, where infill supply is tight and in high demand due to limited land and dense population. This divergence has widened the gap in vacancy; the rate for properties between 10,000 and 50,000 square feet remains near 7 percent as of June but exceeds 10 percent for floorplans over 100,000 square feet. Leasing in the first half of 2025 was concentrated in San Leandro, Hayward and Fremont, driven largely by service and manufacturing tenants, who account for over half of new commitments. Steady light industrial demand is expected to continue supporting the market despite trade policy headwinds, as the metro recorded positive net absorption in the first quarter of 2025.