Q2 | 2020 Oakland Submarkets Retail Overview OAKLAND RETAIL John Cumbelich & Associates’ second quarter survey of Oakland’s retail market VACANCY RATES reflects sharply lower occupancy rates in Oakland’s primary submarkets. The Rock- CLIMB IN Q2 2020 ridge and Grand Lake trade areas experienced a drop in occupancy levels while the Montclair Village trade area stayed level. OCCUPANCY LEVELS GRAND LAKE ROCKRIDGE MONTCLAIR VILLAGE 100 100 100 99 99 99 98 98 98 97 97 97 96 96 96 95 95 95 94 94 94 93 93 93 92 92 92 9.35 9. 9.23 9.43 9.43 9.50 9.50 9.50 9.50 96.00 96.00 9.10 9.10 92.90% 9.35 9.92 9.0 9.39 9.00 96.20 9.30 9.30 99.50 9.0 9.45 90.0 90.0 91.50% 9.4 99.53 9.2 9.0 99.5 99.00 99.03 9.03 99.40 99.93 9.35 9.20 9.20 93.37% 91 91 91 90 90 90 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q2: STORES CLOSE. VACANCY RATES CLIMB. After three months of sheltering in place and government mandated business closures, Oakland retail and restaurant businesses began reopening in late Q2. Due to the historic closures of non-essential retail businesses due to COVID-19, a Q1 market survey was not possible, and consequently the Q1 numbers reflected in this report show a market frozen in time from the Q4 2019 survey. As the market was surveyed at the end of Q2, a picture has begun to form about the state of Oakland retail. Not surprisingly the vacancy rate has moved higher from 4.8% to 7.4% in the overall market. This vacancy rate reflects the highest recorded vacancy rate in the post-Great Recession era. Notably, the upward pressure on vacancy rates was already evident pre-COVID, as occupancy rates had dropped in the four quarters prior to the COVID outbreak. The impacts of COVID have accelerated this growing vacancy trend. The survey captures the state of retail occupancy in three of Oakland’s historic retail shopping districts – Rockridge, Montclair Village & Grand Lake, which total some 825,000 SF in retail and dining space. Both the Rockridge and Grand Lake submarkets saw vacancy rates move higher in Q2. Rockridge vacancy spiked from 1.9% to 7.1%, and Grand Lake vacancy moved from 2.8% to 6.6%. Yet a silver lining to the report’s findings was a slight uptick in occupancy in the Montclair Village submarket, where the vacancy rate actually dropped from 9.2% to 8.5%. Further business disruption is expected in the coming quarters, due in part to strict re-opening measures imposed by Alameda County. The extended closures may create an unrealistic paradigm for businesses to survive, thus raising vacancy rates still further and likely causing rental rates to soften. Q2 | 2020 Oakland Submarkets Retail Overview OAKLAND’S RETAIL DISTRICTS Oakland’s premier retail districts, Rockridge, Grand Lake and Montclair Village, have a comparable inventory of retail space, 825,000 SF, to Walnut Creek’s regional mall area. Yet these vibrant streets outperform Walnut Creek – with occupancy levels that are unsurpassed by any other Bay Area submarket. A powerful mixture of residential density, incomes and growing job creation have pushed Oakland’s retail inventory to record occupancy and rent levels. High barriers to entry have constrained the development of new retail inventory, helping to maintain both occupancy and rent levels. 580 24 13 Rockridge Size: 227,164 SF Occupancy Rate: 92.87% Average Rent: $36-$60 SF OAKLAND Montclair Village Size: 297,292 SF Occupancy Rate: 91.50% Average Rent: $36-65 SF Grand Lake Size: 321,894 SF 980 Occupancy Rate: 93.37% Average Rent: $42-60 SF 880 13 580 Rental rates are quoted Q2 | 2020 Oakland Submarkets Retail Overview Oakland’s distinctive retail landscape is home to some of the Bay Area’s elite restaurants, shopping and entertainment venues. Urban in nature, but low-rise in scale, Oakland’s premier retail streets and shopping districts are the perfect cross between San Francisco’s urban towers and the sprawling, suburban centers of the East Bay. Stimulated by an influx of new residents, tech firms and employment in the post-recession recovery, Oakland’s retail real estate market has achieved historic occupancy levels and record rental rates in recent years. Oakland has a dynamic retail market built on a mixture of both national retailers and local artisanal businesses. Composed of multiple unique shopping & dining districts, Oakland offers a blend of existing centers and new developments that provides consumers with a broad shopping experience. NEIGHBORHOOD SUMMARY ■ Rental Rates Oakland’s Flex Streets Initiative repurposes sidewalks, parking lots and parking lanes for restaurants and other businesses to serve customers outdoors during the coro- 0 navirus pandemic. 0 ■ Starbird Chicken announces plans to open a virtual kitchen in Oakland in 2020. 60 ■ Michelin starred chef to open Masabaga in Uptown, specializing in fish sandwiches 50 with a unique Japanese twist. 40 30 ■ Steph and Ayesah Curry’s Foundation “Eat.Learn.Play.” partners with Oakland restau- 20 rateurs with goal to serve two million meals. 0 ■ Rocky’s Market Brooklyn Basin and The Kitchen at Rocky’s Market will open in the historic 9th Avenue Terminal Building along Oakland’s waterfront. Rockridge Grand Lake Grand Montclair Village Montclair *Rental rates are quoted Q2 | 2020 Oakland Submarkets Retail Overview RECENT TRANSACTION FEATURED RETAILER The firm represented the buyer of a site for the construction of a planned El Pollo Loco restaurant AUTHENTIC located at CALI-MEXICAN FOOD 4301 SONOMA BLVD 2,500 SF VALLEJO, CA NORTHERN CALIFORNIA FOR MORE INFORMATION FOR MORE INFORMATION CONTACT TIM SEILER CONTACT JOE KUVETAKIS FEATURED LISTING / COLLEGE & CLAREMONT – OAKLAND, CA SAN FRANCISCO PORT OF OAKLAND DOWNTOWN OAKLAND Rockridge Market Hall Oliveto Highwire Coffee Roasters 24 Cactus Taqueria a Landmark development opportunity. Pegasus Books Cole Hardware Rockrige Improvement Club C LA Trader Joe’s REME • Core San Francisco Bay Area location Pharmaca M ONTON Safeway Zachary’s Chicago Pizza T Bank of America A Barney’s Hamburgers VE (12,876(12,876 ADT)ADT) Philz Coffee Wood Tavern • Retail, office or mixed-use development opportunity Fed Ex Starbucks Cole Coffee COLLEGOLLE Cream GE AVE (24,598(24,598 ADT)ADT) Claremont Middle School • +250,000 population / $143,000 Avg HHI in 3 mile radius ±480 students & faculty Smitten Ice Cream Beer Baron Bar Jules Thin Crust Millennium Ramen Shop The Brow Lounge FOR MORE INFORMATION First Federal Bank The Golden Squirrel Hank & Frank Bicycles Supercuts CONTACT JOHN CUMBELICH TranSports ABOUT THE FIRM John Cumbelich & Associates is a San Francisco Bay Area firm that John Cumbelich Joe Kuvetakis Chief Executive Officer Associate Broker provides commercial real estate services to Fortune 500 retailers and [email protected] [email protected] select owners and developers of retail commercial properties. The CA DRE ID 01006249 CA DRE ID 01854159 firm’s expertise is in developing store networks for retailers seeking to Tim Seiler Sade Ghorban Partner Associate Broker penetrate the Northern California marketplace, and the representation Trust. [email protected] [email protected] Experience. of premier power center and lifestyle developments. CA DRE ID 0107626 CA DRE ID 01493061 1330 North Broadway, Suite 200A Walnut Creek, CA 94596 TEL 925.935.5400 www.cumbelich.com Q2 | 2020 Oakland Submarkets Retail Overview.