California think tank Rand Corp. has agreed to anchor a new city office building in Oakland, at the corner of Fifth Avenue and Craig Street.

The brainy nonprofit, which first opened a Pittsburgh research office in 2000, will take 59,000 square feet in the proposed 110,000 square-foot building, moving from its current 30,000 square-foot North Craig Street quarters by January 2006.

The deal brings Rand closer to Carnegie Mellon University, the University of Pittsburgh and several university-related outfits such as the Software Engineering Institute on Fifth Avenue.

Rand's new office will accommodate 200 workers -- more than twice the size of Rand's present Pittsburgh staff of 86.

Rand expects to need more than 100 new employees within the next few years, due in part to the volume of local work.

Since opening a research office here, Rand has studied student performance for a city schools' task force, analyzed the local problem of maternal and child heath and worked with CMU to simulate battlefield conditions for automated military vehicles.

It also has new contracts to evaluate local math and science education and study regional government options in light of the city's ongoing fiscal crisis.

Rand's agreement is a dose of good news for a beleaguered commercial real estate market, still plagued by high vacancies and weak demand for new space.

Downtown-based The Elmhurst Group, developer of Rand's building, has been planning the Oakland property for the last two years but was unwilling to start construction without an anchor tenant.

Bill Hunt, Elmhurst's president, now expects work to begin in January or February on the site occupied by a vacant bank branch once belonging to Mellon Financial Corp.

Joining Rand as tenants will be the University of Pittsburgh, which owns the land underneath the building, and Mellon, which leases the land from Pitt.