Bay Area CRE Market Reports

The story this quarter is divergence. Silicon Valley industrial tightened to 4.6% vacancy, while East Bay industrial loosened — Oakland alone lost nearly one million square feet of occupancy in Q3. For buyers and tenants, that means more room to negotiate on East Bay price and lease concessions.

Sacramento is where yield still pencils. Retail there averaged a 6.7% cap rate in Q3 with vacancy under 6%, while California net-lease listings are asking a median of roughly 5.25%. For investors targeting 6.5% or better, the realistic paths are Sacramento and the Central Valley, or value-add and lease-up opportunities in the East Bay — not stabilized Bay Area NNN.

Office remains the weak spot, with East Bay vacancy at its highest this cycle. Multifamily fundamentals are firm: East Bay vacancy fell to 4.8% and asking rents are up 5.5% year over year.