Market Indicators
Relative to One Year Ago
Market Vacancy
Q1 2020
Market Net Absorption
Market Asking Rate
Downtown Class A Asking Rate
Suburban Class A Asking Rate
Key Takeaways - Q1 2020
The market vacancy rate dropped to an 18-year low of 13.3%, down 80 basis points year over year. Downtown Class A vacancy is also now at its lowest point since 2002, dropping to 5.2%.
Market net absorption totaled 213,505 SF for the first quarter, driven by Penumbra’s opening of a 160,000 SF operation in Roseville.
Downtown Class A average asking rates continue to set record highs, ending the first quarter at $3.40/SF full service, up 5.3% year-over-year.
While office-using job growth has been encouraging with 4,300 Professional Services jobs added from Feb. 2019 to Feb. 2020, there will be upward pressure on vacancy moving forward due to COVID-19 related downsizing.
Quarterly sales volume surpassed $461 million, headlined by the $165.5 million sale of Park Tower to KBS Realty Advisors.
Hines is on track to deliver Centene’s 540,000 SF first phase in Natomas by Q3 2020 and the State of California demolished the printing plant at 7th & Richards where it will construct a three-building 1 MSF campus.
Top Sales and Lease Transactions – Q1 2020
(Interactive Map, Click dots for more information)
Lease
Transaction
Sales
Transaction
Bob Shanahan
Research Manager | Sacramento bob.shanahan@colliers.com
(916) 563-3018
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Research &
Forecast Report
Sacramento
Office Market
The Sacramento office market posted a strong start to 2020 thanks to the region’s diversifying economy and robust office-using employment growth. Preliminary statistics show more than 213,000 SF of net absorption in Q1 2020 as the market vacancy rate fell to an 18-year low of 13.3 percent. However, the coronavirus crisis has put the market’s future growth in doubt.
Read On for an Overview of the Sacramento Office Market
Q1 2020
Research &
Forecast Report
Sacramento
Office Market
Q1 2020
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vs. Q1 2019
13.3%
213,505 SF
$2.02/SF
$3.40/SF
$2.17/SF
-80 bps
+324,949 SF
+1.8%
+5.3%
-0.9%
In the midst of the COVID-19 outbreak, information and data is emerging at a quick and uneven rate. The information contained herein has been obtained from sources deemed reliable at the time the report was written. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
Stay tuned for the full market report which will be released shortly.