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Uber Office Deal Turns into Game Changer for Downtown Oakland

Uber's purchase of the old Sears Building in downtown bolstered the city's ambitions to become a high-tech hub and dramatically raised the cachet of Oakland.

By George Avalos, Contra Costa Times

City officials said the deal to bring an Uber Technologies headquarters to Oakland was a game-changer for the East Bay city's downtown district, and early indications suggest that assessment might be on target.

Uber's purchase of the old Sears Building in downtown bolstered the city's ambitions to become a high-tech hub and dramatically raised the cachet of Oakland.

"Oakland is being seen as the next place for tech," Mayor Libby Schaaf said in an interview with this newspaper Wednesday.

The latest sign that Oakland can evolve into a tech hub with a hip urban edge came with word that a site at 323 22nd St. might be developed as an office tower. The site is being marketed by brokers from Colliers International.

"This is a very nice site, one of the very best in the Lake Merritt area," said Sid Ewing, a senior vice president with Colliers. Ewing isn't marketing the 22nd Street site, but is familiar with the plans and potential for the parcel. "That whole block is in play" for development, redevelopment, purchases or leases, Ewing added.

A building that could total 500,000 square feet might be constructed on the site. CIM Realty is planning to develop the property.

"You are really seeing a resurgence of interest in downtown Oakland," Ewing said. "The market is really changing downtown. It's very dynamic, with a low office vacancy rate and high demand."

During the July through September third quarter, downtown Oakland landed leases or commercial property purchases by corporate occupants such as Uber totaling 592,000 square feet, according to a survey by the Lake Merritt/Uptown Association and Downtown Oakland Association community benefit districts.

The Uber deal was the largest by far, with the ride-hailing firm buying an office complex totaling 382,000 square feet.

Other high-profile tenants moving into, or expanding in, downtown Oakland included Brown & Toland leasing nearly 60,000 square feet; The Sierra Club leasing 39,000 square feet; Union Bank taking 37,000 square feet; Corelogic renting 24,000 square feet; California Institute of Regenerative Medicine, a.k.a. the State Stem Cell Institute, leasing 17,000 square feet; and Fluid, a software company, leasing 16,000 square feet.

"As this list of leases demonstrates, jobs are growing in our office towers, within street-level retail and off Broadway both north and south," said Steve Snider, manager of the Lake Merritt/Uptown and Downtown Oakland community benefit districts.

Several of these deals involved a relocation of the tenant from San Francisco to downtown Oakland.

"Uber was a game-changer, it certainly changed the buzz about downtown Oakland," Schaaf said.

©2015 the Contra Costa Times (Walnut Creek, Calif.) Distributed by Tribune Content Agency, LLC.