Unique Character Of Oakland Is Making It A Top Choice For Development, Residents

Oakland is a city uniquely its own, and has shifted from being a runner-up to pricey San Francisco to being a first choice for Bay Area living for many residents and a growing number of companies.

“There's a great vibe and an amazing environment [in Oakland],” Signature Development Executive Vice President Paul Nieto said at Thursday's Future of Oakland event.

At night, people are out and about in the restaurants and venues surrounding Signature's The Hive mixed-use development, he said. The city's history has changed greatly. In the past, both tenants and capital providers would question whether a building was in a neighborhood where it was safe to walk around at night. Now these same players are embracing Oakland's edginess and arts scene while promoting its urban appeal.

“People have a strong affinity for this place, an identity,” Nieto said.

Holding up a tote bag that read “Oakland: It's nicer than you think,” Wendel Rosen attorney Garret Murai launched a discussion about the way the city is perceived.

Thompson Dorfman principal Bruce Dorfman remembers when most of his firm's projects were based in Emeryville because Berkeley had few opportunities for development and it was difficult to finance building in Oakland.

“Now you're seeing major institutional players coming into Oakland,” Dorfman said. “When institutional partners don't like an area, they're not going to invest, but they're kind of like lemmings when they do come into an area.”

Oakland's Transit-Oriented Opportunities

McGrath Properties founder Terry McGrath, who has been in the city since 1994, said he worries less about where the industry is in the cycle and more about opportunities, and Oakland has a lot.

“I'm in the 'buy it broken and fix it' business,” he said.

McGrath mentioned Oakland's "bull's-eye" central location in the Bay Area and the abundance of transit options in a city that also supports walking and biking. As transit-oriented development grows as an approach to deal with the Bay Area's increasingly choked highways, Oakland is offering some of the projects that make that possible.

One is MacArthur Station Residences, a mixed-use development next to the busiest BART station in the Bay Area. The 24-story, 324K SF project will have 402 apartment units, including 45 affordable units and 13K SF of retail.

The project is part of a bigger master plan for the property around the MacArthur BART station.

McGrath, who bought the parcel from BART, and Aaron Fenton, senior project manager for Boston Properties, which is developing the project, were both at Thursday's event.

As long-term holders of property (Boston Properties has a ground lease for the site with an option to acquire the land once the project is built), it is important to make decisions that will affect projects for decades to come, Fenton said. One of those key components is parking.

MacArthur Station reflects Boston Properties' understanding that residents' relationship with cars is changing. Car-sharing and autonomous fleets, as well as the growing use of public transit, will drive that change, he said.

The company is already seeing the shift in some of its other properties. Parking revenue has declined at Embarcadero Center in San Francisco, he said, and the company cannot even lease out half of the stalls it has at 680 Folsom, shifting its sights to outside parking vendors.

MacArthur Station's parking is 0.6 stalls/unit. Boston Properties did not do away with parking completely for several reasons, Fenton said. The parking is above-grade, so it lifts up the residential units so they sit above the level of the freeway, offering a more desirable view. It also is next to a BART station that handles 10,000 commuters every morning and evening, so there is demand for parking. In the future, there may be an opportunity to lease that space to the operator of an autonomous fleet if resident and commuter demand declines, Fenton said. 

Finding Ways To Make Projects Pencil

Even though some speakers said there is a slowdown on the horizon, they spoke about what they are doing now to get projects to pencil, whether it means cutting out parking, building smaller residential units or using modular construction, as with the Moxy Hotel planned for the corner of West Grand and Telegraph avenues.

Pankow Builders Project Executive Bret Firebaugh said efficiency is the height of importance in construction these days.

“Everybody is seeing productivity curves — every industry has been increasing in productivity and construction is going down,” he said.

That makes finding those efficiencies to help with labor and costs key. The 173-room Moxy Hotel will be Marriott's first built using modular construction for a significant savings on cost and time to completion.

Each module has a piece of hallway and a room on either side, Lowney Architecture founder and principal Ken Lowney said. Lowney designed the hotel.

“Hotels are a perfect application of modular construction,” he said.

The seven-story hotel is expected to break ground in 2018.

Lowney also talked about micro-unit residential developments aimed at helping projects pencil while offering housing local residents could afford.

These projects emphasize common spaces on-site, often forgo parking and tout the surrounding city as their strongest amenity.

He mentioned The Nook on Valdez in the Broadway/Valdez District that focuses on “dwelling units” where residents do not have ovens in their own units, but share a kitchen on each floor.

“It's interesting seeing … how we're trying to live differently,” he said.

In the end, authenticity is what is drawing people to Oakland, Brick Architecture and Interiors President Rob Zirkle said.

“This is a real place that has its own energy,” he said.

CORRECTION, OCT. 23, 3:22 P.M. PT: A previous version of this story misspelled a reference to Wendel Rosen attorney Garret Murai. The story has been updated.