The Chico commercial real estate market is experiencing dynamic shifts across industrial, office, retail, and multifamily sectors. Capital Rivers Commercial closely tracks Chico commercial real estate trends to support informed decision-making for tenants, property owners, and investors.
Whether you’re exploring office space in Chico, looking for a Chico warehouse for rent, or trying to find a small shop for rent in Chico, understanding the latest market activity can guide your strategy.
Industrial Market: Rising Vacancy, Stable Rents
The Chico industrial market is currently marked by increased vacancy, now at 9.7%—well above the five- and ten-year averages of around 4%. This is largely due to no new deliveries and more than 600,000 square feet of negative net absorption over the past 12 months.
With no space under construction and over 1.2 million SF listed as available, tenants searching for a Chico warehouse for rent may find greater flexibility. Asking rents remain relatively flat at $9.70/SF, varying by subtype—from $9.10/SF for logistics to $10.80/SF for flex space.
Although rent growth is modest (0.5% year over year), long-term trends show steady appreciation, positioning the industrial market for potential rebound once absorption returns to positive territory.
Office Space: Tight Inventory with Modest Rent Growth
Office space in Chico remains in limited supply. The vacancy rate sits at 4.4%, reflecting a stable environment with little new inventory. In the past year, net absorption totaled 34,000 SF while no new deliveries came online.
The average asking rent is $18.45/SF, with 3-star buildings leasing closer to $20.73/SF. With no new developments under construction, the supply is expected to remain tight in the near term.
Chico’s office market is defined by its steady performance—appealing to tenants seeking stability and predictability, particularly in medical, professional, and administrative uses.
Retail Trends: Balanced Activity, Localized Opportunities
Retail space in Chico posted a vacancy rate of 5.6% and experienced slightly negative net absorption of approximately 90,000 SF over the past year. This has brought the market close to its five-year vacancy average of 4.5%, suggesting a relatively balanced environment.
Rental rates increased 2.1% year over year to an average of $18.70/SF. Strip centers and neighborhood centers saw the highest rent growth, at 3.5% and 3.0% respectively. For tenants in search of a small shop for rent in Chico, these segments may offer well-located options with good visibility.
While only 9,000 SF of new retail is currently under construction, leasing activity has remained strong in high-traffic corridors and shopping centers, pointing to resilient local demand.
Multifamily Overview: Low Vacancy, Slow Development
Chico’s multifamily market continues to exhibit stability. Vacancy is low at 3.9%, and rent growth is consistent at 1.9% annually. Rent levels average $1,390/month—about 20% below the statewide average—making the market attractive for residents and maintaining strong occupancy rates.
There have been no new market-rate multifamily developments since 2022, with only two affordable projects under construction. This limited pipeline may support continued rent growth in the future, although high construction costs and modest rent levels remain barriers for developers.
Investment Market Overview
Sales data over the past year highlights continued interest in Chico’s commercial real estate, particularly from private investors:
- Industrial: $45.4M in volume, with average pricing of $115/SF and cap rates around 6.8%
- Office: $24.0M in volume, average price of $171/SF, and cap rates near 6.9%
- Retail: $58.9M in volume, with consistent buyer activity and a $171/SF average price point
- Multifamily: $29.2M in sales across 14 properties, with price per unit averaging $118K and cap rates near 5.6%
Chico’s commercial assets are generally priced below national averages, which may appeal to investors seeking more accessible entry points and stable performance.
Key Takeaways
Here are some strategic observations based on recent trends across Chico’s CRE sectors:
- Tenants: In the industrial and retail markets, rising vacancies provide leverage and availability. Office tenants should act quickly in light of tight inventory.
- Landlords: Most sectors are seeing stable or improving rents. Vacancy in retail and industrial spaces offers a chance to reposition assets and attract new tenants.
- Investors: Lower price per SF and solid fundamentals may offer value across several asset classes, particularly for long-term holds.
Explore Opportunities with Capital Rivers Commercial
Navigating Chico commercial real estate trends starts with a clear understanding of current conditions. Capital Rivers Commercial provides localized insight and data-driven support to help you find value—whether you’re leasing, buying, or selling.
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