Sacramento Office Market Report

Solid office demand contributes to improving operations. Developers added about 2.5 percent to the metro’s total office inventory over the past two years, ranking among the top five major U.S. markets for supply growth. Still, absorption has held firm, supported in part by some Bay Area employers being willing to establish satellite offices in Sacramento to stay connected to hybrid workforces taking advantage of the metro’s lower cost of living. As a result, the recent improvement in Bay Area office markets should have a limited impact on local demand. Sacramento enters this year with a vacancy rate 60 basis points below its historical average. It is projected to record the second-largest vacancy compression among all major U.S. markets in 2026, aided by a substantial decline in office space delivery this year. Major move-ins this year include a new AMD office in Folsom, as the metro’s appeal to employers is further supported by UC Davis’ expanding talent pipeline and growing reputation, especially in STEM majors.