Q1 2025 Alameda County Industrial Market Report

Market Overview

Alameda County’s markets noted a slowdown in activity throughout 2024, which continued into the first quarter of this year. The decline is heavily attributed to the uptick in interest rates, which led companies to halt or reduce expansion plans. The county also recorded a decrease in employment as many firms laid off employees or began implementing cost-cutting initiatives. So far this drop affected the manufacturing, trade, and hospitality sectors. Alameda County also notes a decline in construction starts, which has been ongoing since 2022. As construction remains on a slower path, this activity is expected to increase absorption levels. Employment growth is also forecast to return to the county, which will aid performance metrics.

• The decline in rent growth to 1.2% follows the national trend as rising interest rates have impacted demand.
• Median incomes have increased, reaching $130,000, outpacing the national average.
• Residents can look forward to the BART extension from the East Bay to San Jose.

Rents | Vacancy | Construction

Alameda County is following the national trend of increased absorption for properties under 100,000 square feet. As such, the average logistic lease for an industrial facility here was under 14,000 square feet over the past six months. Yet, leasing activity remains low, and moveouts are also impacting stabilization. Logistics tenants vacated 11 million square feet in 2024, with flex properties vacating around 4.4 million square feet. This imbalance pushed the vacancy rate up to 8.4% in the first quarter, with flex spaces noting the highest vacancy level at 13.2%.

The construction slowdown can be attributed to reduced activity at the Port of Oakland and increased construction costs across the county. As of the first quarter, 1.3 million square feet is underway, a drop from 2024 levels. The largest project on its way is the Bayer Campus Expansion in Berkeley. The facility totals 918,000 square feet and is scheduled for completion in December 2025. Properties under 100,000 square feet make up the rest of the facilities underway, with deliveries scheduled for July 2025 through January 2026.

Silicon Valley facilities record the highest rents around $20-$25 per square foot. 

Alameda County Sales

Similar to other performance levels in the metro, sales have also decreased. Sales volume in 2024 fell to $1.6 billion, which is the lowest level recorded since 2018. The decline in sales continued into the first quarter of 2025, with a total $433 million in transactions. While this was a decrease from prior sales levels, a portfolio sale in Emeryville was the standout transaction for the quarter. The portfolio includes seven properties that totaled $450 million, and features two flex buildings. Sales volume is expected to remain low in the near term, but if interest rates decline later in the year, the market could see an increase in buyer activity.

Q1 2025 Sales Volume: $433M