Economy: Unemployment Rate Declines
The East Bay, comprising of Alameda and Contra Costa counties, has recorded improving labor market conditions recently. The region added 3,000 jobs over the past year, bringing the unemployment rate to 4.4%, down 40 basis points (bps) year-over-year (YOY) from 4.8%, but still above the national rate of 4.2%. Median household income increased 6.4% YOY to $141,700, while population growth was flat. Expanding research and development and advanced manufacturing activity within the artificial intelligence, robotics and aerospace sectors is drawing high-growth companies to the East Bay, which may create higher household income and greater consumer demand over time.
Supply & Demand: Net Absorption Improves
The East Bay retail market, with an inventory of 51.9 million square feet, rebounded in the third quarter of 2026. The vacancy rate declined to 7.3%, down 20 bps from 7.5% in the previous quarter, but up 10 bps from 7.2% one year ago. The market recorded 109,700 square feet (sf) of positive net absorption, pushing the year-to-date figure back into positive territory at 45,300 sf. Development remained dormant, with no deliveries and no space under construction.
Performance varied by county. Alameda County recorded 115,000 sf of positive absorption, lowering vacancy 40 bps to 6.4%. Contra Costa County posted 5,300 sf of negative absorption, with vacancy holding at 8.3%.
The 880 Corridor led the market with 121,500 sf of positive absorption, bringing vacancy down 80 bps to 5.4%. The North 80 Corridor and Oakland also posted positive absorption of 45,100 sf and 33,000 sf, respectively, though vacancy remained elevated at 13.3% and 12.4%. Other submarkets recorded negative absorption and modest vacancy increases.
The largest retail investment sale in the East Bay during the third quarter was Pleasanton Gateway, a 128,000-sf center acquired by Sterling Organization from Invesco Real Estate for $79.1 million ($618 psf) as part of a portfolio.
Pricing: Average Asking Rent Down
The average asking rent in the East Bay declined 3.0% YOY to $28.87 per square foot per year (psf) on an annual triple-net basis. The highest rents were in the South 80 Corridor ($34.00 psf), the 880 Corridor ($32.46 psf) and the 680 Corridor ($30.50 psf).
