Sacramento Office Market Report

State-led developments bolster market stability. The 2024-2025 delivery slate is set to exceed 2 million square feet — the largest two-year total in over a decade — yet completions remain driven by public-sector projects. Last year, CalSTRS’ headquarters and a government complex were the only notable deliveries, while Aggie Square — UC Davis’ 1.2 million-square-foot mixed-use innovation district — stands as the only major project under construction. With much of this space accounted for, vacancy compression should accelerate as demand flows to existing inventory. After recording its strongest net absorption since before the pandemic last year, Sacramento is well positioned to attract firms, offering the lowest office rents among major Northern California metros and a well-educated workforce. Lower operating costs than urban locales and a growing population should continue drawing tenants to suburbs in Placer and El Dorado counties.