Sacramento – Industrial Market Report – Q2 2022

Capital Rivers Commercial CRE Market report for Industrial Sector in Sacramento for 2022

Market Summary.

The market continues to attract large distribution and ecommerce users that historically focused on either the East Bay or Central Valley markets. These users are primarily focused on the region’s new construction as Sacramento’s older product often does not typically meet the clear height and loading requirements of modern industrial users. As a result, much of the new construction has been high-cube single-tenant buildings. Since 2017, 80% of the completed construction of 100,000 SF or more has been occupied by a single tenant.

Key Takeaways.

  • Sales activity has been tepid in recent years as landlords have been content to hold their properties and push rents, however that trend has changed in 2021 with sales volume surpassing $1 billion for the year. Activity in the first half of 2022, has slowed from that pace but remains in line with historical averages.
  • Market vacancy sits at 3.6%, down -0.8% in the past 12 months. This figure is more impressive given net deliveries during that time totaled 1.9 million SF, meaning the market is absorbing new inventory faster than it is completed.
  • Local asking rents reached $10.30/SF. Rent growth has been primarily a function of sustained levels of low vacancy as well as record levels of construction. The market has quickly absorbed the mostly large spaces coming to market.

The numbers.

Sacramento - Industrial Market Report - Q2 2022

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