San Francisco Business Times
By Blanca Torres
Two years ago, the East Bay Alliance for a Sustainable Economy found itself in the same situation as the people it tries to help: At the brink of being priced out from its longtime home.
The nonprofit previously leased space in the Leamington building, at the corner of 19th and Franklin Streets, which Harvest Properties bought in 2015.
“The new landlord gave us a price we had to refuse and we were forced to move on very short notice,” said Beth Trimarco, an EBASE spokesperson.
After years of San Francisco nonprofits moving across the Bay to escape skyrocketing rental rates, Oakland nonprofits are feeling the squeeze as office space becomes increasing less affordable for groups that have called the city home for many years.
Demand from San Francisco office tenants has brought Oakland’s office vacancy to historic lows and pushed up rents — even for older, Class B buildings. Oakland has some of the fastest growing rents in the country.
Some of the nonprofits that migrated from San Francisco include the Sierra Club, Women’s Foundation of California, Pivot Learning Partners, and California Humanities.
“The boom in office rents is going to hit us pretty hard,” said Inanna Hazel, managing director of Pesticide Action Network North America. The organization works to protect farmworkers and people who live near farms from harmful pesticides.
She anticipates that the group’s rent could double when its 4,300-square-foot lease expires this summer. The organization would prefer to stay in its current space or at least somewhere in Oakland, even if that means leasing less space.
“We’re looking at everything, considering everything,” Hazel said. “It’s what we’re forced to do right now.”
Many landlords want to open up office space for tech tenants, said Orson Aguilar, president of the Greenlining Institute, a public policy, research and advocacy organization.
“Even if a nonprofit is willing to pay (higher rent), they are not invited to stay,” he said.
With vacancy for office space in downtown Oakland close to 7 percent, “it can be challenging for cost-conscious nonprofits to hit their budget expectations in today’s space constrained market,” said Elisa Leilani Konik, a broker with Cushman & Wakefield.
In the past, it was easier and less expensive for nonprofits to find space in downtown Oakland.
“The search for real estate requires more creativity and perseverance,” Konick said. “We are seeing nonprofits teaming up to share space, partnerships with local developers for site acquisitions and the creative re-use of formally underutilized and abandoned buildings.”
Many nonprofit tenants have broadened their search to the Oakland Airport, Alameda and Emeryville to find more affordable offices, she said.
The Greenlining Institute recently moved into a historic office building at 360 14th St. that the nonprofit bought three years ago and renovated.
“Our desire was to control our costs for the future, but also do something special in Oakland,” Aguilar said. The organization started out in San Francisco, but left for Berkeley during the first dotcom boom before moving to Oakland.
The institute occupies about half of its 23,000-square-foot building and uses the remaining conference rooms open to other nonprofits as well as office space that five other nonprofits lease at below-market-rents close to $30 per square foot.
The average Class B rent has reached $48 per square foot in downtown Oakland and about $35 per square foot throughout Oakland, according to brokerage firm CBRE.
“We had so many inquiries that we could have rented out this whole building a couple of times over by nonprofits feeling squeezed,” said Bruce Mirken, a Greenlining Institute spokesperson.
California Rural Legal Assistance bought a small Oakland building in 2014 after lease space for close to 40 years in San Francisco. The move saves the organization $10,000 each month, said Dolores Garay, associate director of external relations.
Oakland sits in the center of the Bay Area where many of the region’s social issues such as gentrification, diversity and poverty coalesce, Aguilar said. Nonprofits want to be close to the populations they serve and be part of a progressive community.
“Not only low-income people of color being displaced (from Oakland), but groups that empower those groups are also facing a significant struggle staying in Oakland,” Trimarco, of EBASE, said. “Oakland, it’s like the center hub of the wheel. If we can work to change the economy in Oakland and change how low-income workers and immigrants are treated here, that has an effect that permeates outward.”
Aguilar said more landlords should consider making space for nonprofits — at a low cost — even as tech companies and other types of tenants move into Oakland.
Last week, Aguilar called for Uber to do so after the Business Times reported that the ridesharing company plans to move only a few hundred instead of a few thousand workers into new office space in a former Sears department store.
“Whatever Uber does with this building will have a huge impact on Oakland,” he said last week. Aguilar has tried setting up a meeting with Uber and Oakland nonprofit leaders for months, but so far has received no response.
He has fielded several inquiries from people interested in buying the Greenlining Institute’s building. Some would-be buyers have offered to lease it back to the institute.
The organization has no interest in selling, Aguilar said.
“We’re not real estate investors. We didn’t come in thinking we got a great steal,” he said. Receiving offers, “was pretty strange. It was obvious a non-profit had bought it and had long-term plans… It seems like something had shifted in Oakland.”