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Market Report

Oakland Multifamily Market

2024 Investment Forecast

South Suburbs Have More Upbeat Outlooks
As Rents Soften in Oakland’s Urban Core

Construction in the most vacant submarket enflames headwinds. South Contra Costa and Alameda counties are better positioned to withstand performance softening expected throughout the metro in 2024. San Ramon-Dublin and Hayward-San Leandro-Union City, in particular, stand out as areas with relatively tight vacancy and greater rent stability. These suburbs also combine for a sub-20 percent share of the 2024 delivery slate, helping preserve that standing. Rental demand for the incoming supply is also reflected in both submarkets having Class A vacancy rates below the overall metro measure. Conversely, operational challenges in the urban core could grow, after the area showed initial resilience when ongoing rent deceleration began in late 2022. Ending that year, Oakland-Berkeley had steadier monthly rates than most of Contra Costa County, but local strength ceased as 2023 progressed. By September of last year, the core noted the largest annual rent drop in the market. Meanwhile, positive developer sentiment prior to that shift has implications for 2024. Oakland-Berkeley comprises over two-thirds of this year’s delivery slate, intensifying supply pressure in an area that has the highest vacancy in the metro. Operators competing with the additional development could increasingly opt for concessions, putting a near-term strain on rents in the area. Beyond 2024, the pipeline here is thin, providing a backstop and promoting absorption of existing supply.

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