July – December (Q3 and Q4) 2015

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Disclaimer: The City of Berkeley makes no representations about the suitability of the information contained in this

document for any purpose. The information Is provided "as is" without warranty, either express or implied, of any kind.

The published document may contain technical inaccuracies or typographical errors. Changes are periodically added to

the information herein. The City of Berkeley may make improvements and/or changes to the document at any time.

Economic Dashboard

Office of Economic Development

CITYWIDE ECONOMIC DASHBOARD

EMPLOYMENT………………………………………………………………………...........………3• Labor Force & Employment Figures

BUSINESS DEVELOPMENT………………………………………………………………………4-6• Business License Activity• Top Employers• Innovation Sector• Small Business Revolving Loan Fund

COMMERCIAL ACTIVITY…..…………………………………………………………….………7-10• Office Trends & Transactions• Manufacturing Trends• Retail Districts• Sales Tax Revenues • Vacancy Rates

DEVELOPMENT & HOUSING…………………………………………….………….……..11-12• Construction & Pipeline• Housing Costs

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• Berkeley’s average unemployment rate for Q4 2015 (October – December) was 3.6%, down from 4.2% during the same period the previous year.

• In comparison, Alameda County’s average unemployment rate in Q4 2015 was 4.5%, while California’s was 5.8%.

• The unemployment rate continues to fall despite a slight increase in the overall participation in the labor force.

• As of Q3 2015, there were 66,348 jobs located in Berkeley. Berkeley’s jobs to employed residents ratio is calculated at approximately 1.12.

• The industry sectors that showed the greatest job growth in Berkeley from 2014 to 2015 include Professional Services (9% growth, or about 750 new jobs) and Food and Beverage Services (7% growth, or about 400 new jobs).

YearLabor Force

EmployedResidents

Unemployment Rate

2015 61,767 59,533 3.6%

2014 61,033 58,467 4.2%

2013 59,800 56,633 5.4%

Berkeley Q4 Averages, 2014-2016

labor force & employment figures

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Sources: CA Employment Development Department, Monthly Labor Force Data; Bureau of Labor Statistics, Quarterly Census of Employment and Wages

employment & jobs: fast facts

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2000 2002 2004 2006 2008 2010 2012 2014

Unemployment Rates,Q4 2000-2015

City of Berkeley Alameda County California

• The number of active business licenses in Berkeley has grown steadily over the past decade; the total figure grew by 54% from 2005 to 2015. In 2015, growth slowed somewhat (to 1%).

• 46.3% of active businesses in Berkeley are minority- and/or female-owned.

• Lessors of Residential Buildings and Dwellings and Non-Residential Buildings (as defined by NAICS code) make up the largest single group of business licenses issued (25%).

Active Business Licenses in Berkeley (as of May, 2016): 12,854

business license activity

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Top Industries (3-Digit NAICS codes):• Real Estate: 34%• Professional, Scientific and Technical Services: 16%• Specialty Trade Contractors: 12%• Construction of buildings: 9%• Ambulatory Health Care Services: 9%• Food Services and Drinking Places: 5%• Administrative and Support Services: 5%• Personal and Laundry Services: 5%• Educational Services: 3%• Performing Arts, Spectator Sports, etc: 2%Source: City of Berkeley

Active Business Licenses, 2005-2015

Non-Minority,

Non-Female Owned, 54%

Non-Minority, Female-

Owned, 21%

Non-Female, Minority-

Owned, 12%

Minority & Female-

Owned, 13%

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

• As of Spring 2016, there are nearly 300 startups based in Berkeley offering 278 open jobs in software and bio science fields.

• The Batchery, the first startup incubator independent of UC Berkeley, opened in fall 2015.

• Boston-based Agenus announced it will open its first West Coast immune oncology lab in Berkeley.

• Over $270MM of venture investment capital was raised by Berkeley-based companies in 2015.

• Over 1,500 people attended startup job fair with tech diversity partners organized by the Office of Economic Development (OED) and Berkeley-based startup Localwise.

top employers & innovation sector

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[top 25 employers]

Startup job fair, hosted by Localwiseand OED with tech diversity partners, January 2016.

[innovation sector update]ALTA BATES MEDICAL CENTER MEYER SOUND

ANSYS, INC MSCI INC

BAYER HEALTHCARE, LLC OC JONES & SONS

BERKELEY BOWL PRODUCE PACIFIC STEEL CASTING COMPANY, LLC

BERKELEY CEMENT INC RECREATIONAL EQUIPMENT INC

BERKELEY CITY COLLEGE SIEMENS CORPORATION

BERKELEY MARINA DOUBLETREE UNIVERSITY OF CALIFORNIA, BERKELEY

BERKELEY REPERTORY THEATRE US POSTAL SERVICE

BERKELEY UNIFIED SCHOOL DISTRICT WEATHERFORD MOTORS INC

BOEHRINGER MANNHEIM CORP WHOLE FOODS MARKET CALIFORNIA INC

CITY OF BERKELEY XOMA(US) LLC

KAISER PERMANENTE YMCA OF THE CENTRAL BAY AREA

LAWRENCE BERKELEY LABORATORY Source: EDD, QCEW Data 2015

Software30%

Bioscience17%

Clean Tech9%

Consumer Products

8%

Electronic Devices

8%

Other7%

Professional Services

21%

Berkeley's Startup Economy

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The City of Berkeley’s Revolving Loan Fund provides access to capital for businesses that don’t qualify for traditional commercial loans. Since the program was launched in 1980, the City has leant nearly $1.6 million to 38 borrowers. There are currently 6 active loans and two approved loans pending disbursal. In Q3 2015, the RLF loaned $150,000 to the Jazz School (see sidebar).

small business revolving loan fund

PORFOLIO SUMMARY

Total Loans Active Loans

Number of RLF Loans 38 6

RLF $ Loaned $1,595,527 $405,000

Total Non-RLF $ Leveraged $5,486,835 $592,238

Approved Loans (pending disbursal) $250,000

Private Sector Jobs Created 176 36

Private Sector Jobs Saved 38 18

current borrowers include:

The California Jazz Conservancy, also known as the Jazz School, is a jewel of an organization nestled in Downtown Berkeley’s Arts District. After achieving accredited status in early 2015, the school is expanding operations with a state-of-the-art, 70-seat performance space, and new advanced practice rooms for students. Construction at the new site across Addison Street is set to begin in September 2016. The $150,000 loan from

Berkeley’s Revolving Loan Fund will allow the Jazz School to fund construction and development of the school’s expansion, nearly doubling the enrollment of aspiring musicians developing their craft downtown.

2015 Q4 Office Market, Berkeley Indicators

Total Inventory 2,714,461 SF

Under Construction 40,000 SF

Availability Rate 3.31%

Qtr Gross Absorption 165,548

Qtr Net Absorption 8,240

YTD Net Absorption 92,312

Average Asking Rent $2.62 / SF

office trends and transactions

• Overall office availability dropped to 3.3% in Q4 2015 from 4.7% in Q2 2015. Berkeley continues to have the lowest office availability of any municipality in the immediate sub-market.

• New construction: 40,000 square feet of new commercial space is currently in the pipeline.

• Notable transactions and occupancy:

• Aduro Biotech leased all of 740 Heinz’s 105,000 square for cancer drug development.

• The Marchant Building (3100 San Pablo) recently refurbished for office, manufacturing and warehouse occupancy.

• HERE North America leased 10,000 square feet at 2168 Shattuck Ave.

Sources: Newmark Cornish & Carey, I-880/I-80 4Q15 Office Market Report; Colliers.

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OFFICE AVAILABILITY, EAST BAY CITIES2014 Q4 - 2015 Q4

Alameda

Berkeley

Emeryville

Oakland

Richmond

Market-AreaAverage

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Manufacturing & Wholesaling, 2015 Q3 Indicators

Total Jobs 4,847

Total Firms 268

Total Quarterly Payroll $84,168,256

2016 Q1 Manufacturing Real Estate

Total Inventory, including Industrial, R&D and Warehouse space (SF)

5,133,041

Industrial Available (SF) 178,070

Total Availability Rate 3.47%

Average Asking Rent for Manufacturing Space $1.02 / SF

manufacturing trends and analysis

• Berkeley’s largest manufacturing subsectors by employment are chemical manufacturing (1,725 jobs) and food and beverage manufacturing (approximately 700 jobs).

• Total manufacturing quarterly payroll grew by 16% from Q2 2013 to Q4 2015.

• While overall manufacturing employment was flat over the past two years, chemical manufacturing (21% increase) and food manufacturing (23% increase) grew rapidly.

• Growth is limited by very low availability of space.

• Average asking rent in Q1 2016 in Berkeley ($1.02) is the highest in the immediate sub-region, approximately double that of City of Oakland ($0.54).

Sources: Newmark Cornish & Carey, I-880/I-80 1Q16 Industrial Market Report and QCEW Data Q3 2015.

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Business Spotlight: Fieldwork Brewing Co.

Photo: Brew California

Since opening in February 2015, Fieldwork has grown rapidly, creating over 30 jobs. Their tasting room is an excellent example of the trend of local manufacturers supporting expansion through accessory food and beverage services and retail sales on site.

commercial districts and vacancy rates

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District2010 Q1

2012 Q2

2014 Q4

2015 Q3

2016 Q1

Downtown 13.2% 10.7% 11.2% 8.4% 6.7%

Elmwood 10.7% 10.8% 2.0% 2.0% 1.5%

North Shattuck 10.5% 4.5% 1.6% 2.1% 2.6%

San Pablo 6.6% 7.9% 5.9% 7.3% 7.3%

Solano 6.3% 4.4% 4.2% 3.5% 5.4%

South Berkeley 11.0% 12.3% 8.9% 7.9% 8.2%

Telegraph 15.3% 17.9% 12.7% 7.1% 7.1%

West Berkeley 4.0% 3.9% 3.3% 8.0%

University 10.9% 10.1% 14.7%

Citywide Average 10.9% 8.1% 6.6% 5.9% 7.6%

Ground floor commercial vacancy has mostly trended downward Citywide since 2010, with significant improvements in the Downtown and Telegraph districts. Two exceptions include University Avenue, which has experienced a number of new vacancies (including the former Saver’s space), and West Berkeley, where one large mixed-use, light industrial space (the former Pyramid Brewing) has remained vacant since late 2015.

Vacancy Rates by District, Calculated by Square Footage, 2008 – 2016

Ground Floor Commercial Occupancy by Category, by District, 2016 Q1

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Arts,Entertainment& Recreation

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PersonalServices

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Retail

Total Annual Sales Tax Revenue - Past 4 Quarters Q2 2014 - Q1 2015 Q2 2015 - Q1 2016 Change

City of Berkeley $16,968,072 $17,565,958 +3.5%

SF Bay Area (Nine County Region) $1,380,504,394 $1,429,253,457 +3.5%

Sate of California $6,121,805,426 $6,316,966,544 +3.2%

sales tax revenues

City of Berkeley 2015 Q4 Sales Tax Revenues by Subsector

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Berkeley’s sales tax revenues have steadily increased since 2010. The Food Products and Services subsector is the largest contributor to the city’s sales tax revenue, followed closely by General Retail. The Food Products and Services subsector has continued to show strong growth and Business to Business activity increased at the end of 2015. Source: MuniServices

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6%

31%

29%

4%

14%

Business to Business Building and Construction

Food Products and Services General Retail

Miscellaneous Autos and Transportation

City of Berkeley Q4 Sales Tax Revenues, 2011 - 2015

$3,571,489 $3,802,964

$3,925,302 $4,145,570

$4,317,283

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Berkeley is currently experiencing an upsurge of larger projects. The total valuation of permits issued in 2015 was nearly $213 million, 9% higher than the previous year and 67% higher than the annual average from the prior ten years ($129 million). Construction did level off in the second half of 2015, but the City expects the surge to continue in 2016. Major construction projects in 2015 included 2600 Shattuck, 801 Grayson, and 2121 Dwight.

There are currently 23 multi-unit (5+ units) housing projects totaling 1,605 housing units that are entitled for development or under construction. An additional 17 multi-unit projects totaling 1,254 units are proposed and seeking entitlement. By comparison, about 1,100 units in multi-unit projects were completed from 2005 to 2014. The majority of these development projects are clustered along University Avenue, San Pablo Avenue, and in the Downtown and Telegraph districts. UC Berkeley has also been active in development, opening a new student center in late 2015, currently constructing an office/education building on Berkeley Way and a new aquatics center on Bancroft, and recently entitling a 783-bed project (Stiles Hall).

construction & pipeline

Multi-Unit Projects (5+ Units), 2005 to Present

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Building Permits in Berkeley by Quarters, Construction Value and Count of Permits, 2000 Q1-2 to 2015 Q3-4

housing costs

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Median Sale Price, Single-Family Homes, 2016 Q1

Alameda $950,000

Albany $848,888

Berkeley $925,000

El Cerrito $776,500

Emeryville $775,000

Lafayette $1,433,500

Oakland $575,000

Richmond $412,000

San Leandro $552,500

San Francisco $1,320,000

Housing costs in Berkeley, for both ownership and rental units, continued to rise in 2015, consistent with the entire core Bay Area region. In Q1 2016, median sales prices for single-family homes decreased for the first time in nearly two years, falling back under $1 million. Still, the historically high cost of housing combined with low inventory poses challenges for Berkeley’s labor market and low income communities.

Sources: MLS, Courtesy Red Oak Realty; Berkeley Rent Stabilization Board.

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Housing Prices in Berkeley, 2004-Present

Median Rents

Median Sales Price, Single-Family Homes