Commercial Real Estate in Berkeley: Downtown, Corridor and West Berkeley Industrial Zoning

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Berkeley’s commercial property sits in a small set of distinct places: the downtown around the Downtown Berkeley BART station, the commercial avenues such as University, San Pablo, Shattuck, Telegraph, Solano and Adeline, neighborhood shopping districts such as Elmwood and North Shattuck, and the manufacturing and lab districts of West Berkeley. Every parcel is under the City of Berkeley’s zoning ordinance, Title 23 of the Municipal Code, and the district changes block by block. Confirm the exact district on the city’s GIS before you price a use.

Who controls the parcel

The City of Berkeley regulates all private land within its limits. Two edges need care. Solano Avenue and San Pablo Avenue cross into Albany, and parts of the hills border Oakland and Kensington, so an address alone may mislead. UC Berkeley’s campus and university-owned land are generally outside city zoning, though they shape the Southside and Telegraph districts next to them. Commercial districts are set out in Chapter 23.204 and manufacturing districts in Chapter 23.206.

Berkeley zoning for commercial, industrial and mixed use

District purposes and heights summarized from Chapter 23.204 and 23.206; summary figures for districts other than C-C and C-DMU are from the GoCodebook Berkeley zoning overview and should be checked against the code tables.

Downtown, the avenues and West Berkeley

Downtown (C-DMU). The district carries out the 2012 Downtown Area Plan. Base heights run from 40 feet in the Outer Core and Corridor subareas to 75 feet in parts of the Core. The Zoning Adjustments Board may approve up to five buildings above those limits: two at about 75 to 120 feet in the Core or Outer Core, and three at about 120 to 180 feet in the Core. Each tall building must deliver significant community benefits, such as affordable housing, open space, transit programs or job training, under a binding written agreement. New buildings must meet LEED Gold or equivalent and pay the Streets and Open Space Improvement Plan fee. In the Arts District Overlay, ground-floor offices need an administrative use permit and a finding that they will animate the street.

The avenues (C-C). Mixed-use buildings in C-C must put housing on the third floor and above, need 200 square feet of open space per unit (reducible by use permit) and have no FAR cap. Every AUP or use permit must find that the project will not break up ground-floor retail continuity or exceed traffic and parking capacity.

West Berkeley. Housing is not permitted in M, MM or MU-LI. Research and development is allowed by zoning certificate in MM and MU-LI, with an AUP above 20,000 square feet. Commercial biological or physical labs are not permitted in M or MU-R. They need an AUP in MM (a use permit above 20,000 square feet) and a use permit with a public hearing in MU-LI. A change of use in an existing building triggers the same permits as new construction. Many service uses carry size caps, such as business support services over 3,000 square feet.

Berkeley-specific rules: downtown storefronts, banks and frontages

• Downtown storefronts. In C-DMU, offices, real estate and title offices, group instruction and gyms must keep a storefront display or transparency at least 10 feet deep.
• Banks. Downtown banks under 7,500 square feet outside the Arts District need only a zoning certificate; larger ones need an AUP, as do ATMs in non-bank buildings.
• Residential entrances. New downtown buildings cannot put individual unit entrances on the ground floor of public-serving frontages.
• Neighbors. C-C lots that abut or face a residential district must meet the transition standards in Section 23.304.130.
• Short-term rentals. Chapter 23.314 regulates short-term rentals separately; confirm its rules before buying a building for that use.

Transfer tax, business tax and property tax

The Alameda County Clerk-Recorder collects the county documentary transfer tax of $0.55 per $500 of consideration plus Berkeley’s city tax on full value: $15.00 per $1,000 up to $1.7 million and $25.00 per $1,000 above it. On a $5 million building, the city tax alone is $125,000. Berkeley has offered part of its transfer tax back for seismic work, but we did not verify the current terms, so ask the city before closing. Under Proposition 13, a sale generally resets the assessed value. Berkeley levies a business license tax, but we did not verify its rates.

Due diligence that matters in Berkeley

Start with our commercial due diligence checklist, then add:

• Confirm the district and subarea; heights and FAR change sharply between C-DMU subareas and between avenue districts.
• For a downtown building over 75 feet, map the remaining tall-building allocations and the community benefits required.
• In West Berkeley, confirm that labs, R&D or offices are permitted at your square footage, and that a change of use will not trigger a hearing.
• For mixed use on the avenues, check that floors three and up are residential and that open space is met.
• If the building has five or more apartments over open ground-floor space, check its status under Berkeley’s soft-story ordinance.
• Budget the city transfer tax at $25 per $1,000 above $1.7 million.

Questions people ask

Sources & notes

1. Berkeley Municipal Code Title 23: 23.204.020 commercial use table, 23.204.050 C-C, 23.204.130 C-DMU, 23.206.020 manufacturing use table
2. GoCodebook, Berkeley zoning overview (district summary)
3. Alameda County Clerk-Recorder, Real Property Transfer Tax

Note: Berkeley’s district standards change often. Confirm heights and permits against the current Title 23 tables.

This page is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

Related: Berkeley real estate guide · Multifamily property in Berkeley · Commercial real estate services