East Bay October 2026 Report

Industrial, Multi-Family, Office, and Retail — a market where apartments are tightening fast, advanced manufacturing is reshaping industrial, and office and mall space are still working through excess supply.

Overview

The East Bay enters the fourth quarter of 2026 with sharply different conditions by property type. Multi-family is the strongest: vacancy has fallen to 4.8% from 5.9% a year ago, absorption of about 2,900 units far exceeds 440 units delivered, and asking rents are up 5.5% (Downtown Oakland and Emeryville are up more than 16%). Industrial is split between power-capable manufacturing space, which tenants such as OpenAI, Tesla, and Velo3D are leasing, and older logistics space that is losing ground to cheaper inland alternatives. Office remains the weakest sector at 16.3% vacancy with no construction underway. Retail is divided between resilient neighborhood and strip centers and weaker malls and large-format space.

Industrial: demand is concentrated in modern, power-rich buildings in Fremont, Newark, Union City, Livermore, and Hayward, while vacancy stays elevated (flex 13.1%, logistics 8.9%) and rents are falling 1.6%.

Multi-Family: the 4 & 5 Star segment, which absorbed most recent deliveries, now has 4.7% vacancy, and the development pipeline has thinned to 1.1% of inventory.

Office: net absorption is negative for the 12 months, the vacancy rate is at its highest of the cycle, and quality is the dividing line — 4 & 5 Star space is 29.1% vacant versus 9.3% for 1 & 2 Star.

Retail: grocery, fitness, discount, and experiential tenants are driving most leasing; leasing volume of about 1.7 million SF compares with a pre-pandemic norm closer to 2.5 million SF.

Industrial

Leasing

Leasing conditions remain mixed, with vacancy at 9.2% and availability at 9.9% as the market absorbs recent deliveries. Demand is concentrated in modern buildings that can support advanced manufacturing, technology, and power-intensive uses, and access to power is increasingly a deciding factor in site selection. Logistics demand has weakened as tenants pursue larger, more efficient distribution space farther inland, while some warehouses are being converted to manufacturing uses. The strongest performance is in Fremont and along the southern I-880 corridor; newly completed buildings such as 49000 Milmont Dr and 47100 Lakeview Blvd are fully occupied, while some new logistics buildings in Hayward and Antioch remain available.

Rent

Market asking rents average about $17.00/SF, with annual growth of -1.6%, as elevated vacancy and a tenant-favorable environment limit landlords’ pricing power. The divide between power-capable modern space and older warehouse stock keeps widening. Fremont remains the highest-rent large submarket. Logistics is the weakest segment ($15.01/SF), with recent warehouse leases at $6.60/SF in Richmond, $13.20/SF in Union City, and $16.32/SF in Hayward. Flex commands the highest rents ($23.60/SF average), including a Fremont lease at $28.20/SF and a Berkeley lease at $35.40/SF. Specialized and advanced manufacturing space sits in between: Quanta Manufacturing leased 143,086 SF in Newark at $22.20/SF, and Tesla’s Fremont lease reportedly achieved $24.60/SF.

Construction

About 670,000 SF is under construction, less than 1% of inventory, and more than half of the pipeline is preleased. Developers favor build-to-suit and specialized projects. Livermore has the largest preleased project — the 471,469-SF facility at 710 Atlantis Street, leased to Lam Research and due in 2026 — and Fremont has manufacturing-oriented buildings underway at Campus @ Bayside and the Palisade Fremont Innovation Center. Hayward’s 99,395-SF Diablo Park is a power-capable telecommunications-oriented facility. Participants describe Fremont as an emerging hub for AI server manufacturing, and say transmission-grid limits increasingly shape both tenant and developer decisions.

Multi-Family

Vacancy

The vacancy rate is 4.8%, down sharply from 5.9% a year ago and below the long-term average of 5.0%. Net absorption totaled about 2,900 units over the past 12 months against 440 units delivered, as the market shifts from a supply-driven environment to one balanced by demand. Hiring in AI and technology is adding to household formation, and the East Bay remains an affordable alternative to San Francisco. Emeryville and Downtown Oakland rank among the leaders, and Fremont benefits from its growing role in advanced manufacturing. The 4 & 5 Star segment absorbed most recent deliveries and relies more on concessions, but its vacancy has fallen to 4.7% from double-digit levels at the peak of the supply cycle.

Rent

Average asking rents are about $2,590/month, up 5.5% over the past year, with effective rents up 7.7% as concessions recede. Downtown Oakland (+17.3%) and Emeryville (+16.3%) posted the strongest annual growth. Rents are highest in Dublin/Pleasanton/Livermore (about $3,001) and Fremont/Newark ($2,892), with Berkeley and Walnut Creek/San Ramon near or above $2,750. By segment, 4 & 5 Star rents average about $3,310, 3 Star $2,630, and 1 & 2 Star $2,090. Free rent, typically four weeks, remains the most common concession, though several newly delivered Berkeley properties have largely eliminated concessions.

Construction

About 2,200 units are under construction (1.1% of inventory), and only 440 units were delivered over the past 12 months. Walnut Creek/San Ramon has the largest pipeline (694 units), followed by Downtown Oakland (595) and Dublin/Pleasanton/Livermore (359). The largest projects are the 557-unit Lake Merritt BART development in Oakland, the 456-unit Avalon San Ramon, and the 238-unit BART Transit Village in Walnut Creek; student housing remains an active niche, including Berkeley’s 207-unit The U at California. Construction costs remain the main obstacle to new development.

Office

Leasing

Leasing remains subdued, with 12-month net absorption of about -520,000 SF and vacancy at 16.3%. Many occupiers are focused on cost control, space efficiency, and hybrid work rather than expansion, and a large share of activity comes from renewals. Leasing momentum has stabilized relative to the lows of 2023 and early 2024, suggesting demand may be nearing a cyclical floor, but sublease space competes directly with landlord inventory. Life science and advanced manufacturing tenants — CytomX Therapeutics, Upside Foods, and Mendaera among them — remain an important source of demand. Bishop Ranch/San Ramon and Emeryville are the stronger-performing locations, while Oakland’s 601 City Center remains about 43% vacant.

Rent

Asking rents are about $37/SF, up 0.3% annually; elevated availability and negative absorption limit pricing power. Rents average about $46 for 4 & 5 Star buildings, $35 for 3 Star, and $31 for 1 & 2 Star. Walnut Creek, Emeryville, and parts of Bishop Ranch command the highest pricing — a 50,600-SF lease at Mount Diablo Plaza was completed at $48.00/SF and Upside Foods leased 18,505 SF at 6101 Christie Ave. at $47.40/SF NNN — while suburban locations require discounts (Concord Gateway marketed at $28.80/SF full-service, and a Pleasant Hill sublease at $25.80/SF). Oakland spans a wide range, from $39.00/SF at Golden West Tower and $33.60/SF at the Breuner Building to $17.40/SF for older space near the Oakland airport. Free rent, tenant improvement allowances, and turnkey spec suites remain common.

Construction

No office buildings are under construction, and no new projects broke ground during the quarter. The largest recent completion was a 56,176-SF building in Oakland-West delivered in 2025, followed by a 66,000-SF office building in Martinez and Fremont Bank’s 34,905-SF headquarters, both completed in 2024. Developers have shifted toward repositioning, adaptive reuse, and spec suites, and as more office space is earmarked for demolition or conversion, inventory is expected to shrink rather than grow.

Retail

Leasing

Leasing remains challenged by soft tenant demand and elevated move-outs, with trailing 12-month net absorption of about -52,000 SF and availability at 5.8%. Activity is split by size and format: small shop space in neighborhood and walkable locations draws the strongest demand, while large boxes and mall space draw less. Leasing volume of about 1.7 million SF compares with a pre-pandemic norm closer to 2.5 million SF. Former big-box and department-store space is being re-tenanted by grocers and other necessity users — T&T Supermarket took 64,761 SF at NewPark Mall, Las Montañas Supermarket 31,849 SF at Winton Plaza, and Crunch Fitness 25,016 SF at El Cerrito Plaza, with H Mart planning a 100,000-SF Fremont flagship. Hayward/Castro Valley, Fremont, and the Antioch/Pittsburg corridor show the strongest momentum, and strip centers were the only subtype with positive absorption in the latest quarter.

Rent

Asking rents average about $34/SF, up 2.3% annually — positive but moderate by historical standards. Neighborhood centers are the strongest-performing subtype at about $36/SF (+3.0%), and strip centers have the healthiest momentum at about $31/SF (+3.4%). Walnut Creek-BART/Downtown, Emeryville, and parts of Fremont command premium rents, while Hayward/Castro Valley and Richmond/San Pablo have seen notable appreciation. Recent deals include a La-Z-Boy renewal at $31.92/SF NNN, Ross Dress for Less at $21.00/SF NNN, Party Teller in Brentwood at $21.00/SF NNN, and a 28,455-SF lease in Dublin at $22.00/SF NNN.

Construction

About 60,000 SF is under construction (0.1% of inventory), and deliveries over the past 12 months totaled 119,000 SF (86,000 SF net). The pipeline is small-format and service-oriented: the largest project is the 35,835-SF Bay Area Animal Resource Center in Berkeley (March 2027), followed by the 16,335-SF Brickyard development in Livermore and small buildings in Livermore and Antioch/Pittsburg. Recent deliveries skew to grocery and daily-needs users, including a 154,582-SF Costco in Brentwood, a 23,204-SF Sprouts in Pittsburg, and the 40,602-SF Tokyo Central at Bay Street Emeryville.

Economy

The East Bay economy remains a solid foundation for commercial real estate demand despite lingering headwinds. Total employment is about 1.19 million jobs, up 0.7% year over year, with gains in education and health services. Unemployment is 4.5%, slightly above the national 4.3% but down 0.3 points from a year ago. Population is about 2.81 million and growing 0.2%, while the labor force fell 1.2%.

Median household income rose 3.7% year over year, to about $137,000 per CoStar’s demographic table (the narrative cites $130,000), well above the U.S. median of about $85,000 but below San Francisco and San Jose. The East Bay’s relative affordability, BART access, proximity to major employment hubs, and diverse economic base continue to attract residents; Oakland and Berkeley benefit from walkable urban environments, while suburban areas offer affordability.

Job growth remains uneven, with tech-related employment volatile amid industry restructuring and AI-driven shifts, and immigration-policy changes could affect rental demand, since foreign-born renters make up a significant share of the Bay Area’s population. Economic conditions are expected to remain favorable for commercial real estate demand, though interest-rate and global-economic risks persist.