The Sacramento office market is beginning to show signs of recovery. The vacancy rate of 10.2% is near the five year average of 9.5%, having increased by 0.3% over the past 12 months. Demand fundamentals, however, have yet to recover, with annual net absorption totaling 690,000 SF. Market activity has largely stabilized as tenants have a much better idea of their future real estate needs, and there are early signs of demand recovering.
- With the extended work from home experiment possibly nearing completion, tenants have recognized a continued need for office space, albeit sometimes with a reduced footprint.
- Downtown still commands a sizable pricing premium over the balance of the market with its abundance of quality product and strong leasing prior to the pandemic.
- Sacramento’s office sales market reported a modest 2021 in terms of sales volume reaching $1.1 billion over the past 12 months.
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