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Why downtown Oakland is booming

For the first time in more than a decade, Oakland’s skyline has a new office tower — and many more to come.

Last month, health insurer Blue Shield of California began moving 1,200 workers to 601 City Center, a 24-story building a few blocks west of the 12th Street/Oakland City Center BART Station.

The new high-rise has sweeping views of downtown Oakland, the Bay Bridge and the nonprofit’s old home, San Francisco, where it was headquartered for 80 years.

Blue Shield’s cross-bay move will result in major rent and tax savings, said Sandra Clarke, the company’s chief financial officer. Two-thirds of its employees already live in the East Bay and now have a better commute.

“San Francisco real estate is very expensive. We want to make the best use of our (health care) members’ money that we can,” she said. “The options that Oakland offers, especially in this downtown area, make it worth really serious consideration. I know we’re very happy that we made this decision.”

The new building has more light and air than Blue Shield’s former offices at 50 Beale St., a 1967 building that’s now dwarfed by newer towers next door occupied by Salesforce. The Oakland tower also has floor-to-ceiling windows, a gym and a roof deck.

A wave of migration from San Francisco, along with local business growth, has made Oakland one of the hottest local economies in the country.

Additional office projects totaling more than 4 million square feet, or room for 20,000 more employees, are under construction or planned downtown, which currently has around 80,000 jobs.

More than a dozen major housing projects are also in progress. Combined with easy BART access and proximity to new restaurants and bars, downtown is seeing the biggest building boom in decades, experts say.

The skyline’s going to be totally reimagined,” said Chris Roeder, a real estate broker at JLL. “The perception of Oakland has changed.”

Many of the new projects have already have full tenant commitments. Kaiser Permanente plans to build a $900 million headquarters that would be the largest office building in Oakland. BART plans to buy a renovated property at 2150 Webster St. for a new headquarters.

One of its neighbors will be the Sierra Club, which moved to Oakland in 2016, after 124 years in San Francisco, to save on rent. San Francisco tech firms Square and Credit Karma have also signed major Oakland office expansions.

Morten Jensen, president of Oakland architecture firm JRDV, increasingly sees a “dual core” of major employment and housing centers in San Francisco and Oakland, connected by a 15-minute BART ride.

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