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Market Report

Sacramento Industrial Market Report

Midyear 2023

Demand Pullback Touches All Metro Areas, but
Local Performance Metrics Remain Sound

Vacancy is rising, with additional supply pressure coming. After hitting an all-time low of just 3.2 percent in the first quarter of 2022, vacancy in Sacramento bounced above the 4.0 percent mark in March of this year. On a positive note, net absorption eclipsed 250,000 square feet in each quarter spanning those 12 months. Demand, however, was outstripped by elevated construction spurred by the record-tight conditions. This dynamic persists with metro inventory expanding by more than 2 percent for a fourth straight year, and surpassing demand in 2023 amid economic uncertainty. Sacramento County has a substantial amount of unaccounted-for space slated to deliver, particularly near air cargo hubs. However, vacancy in the county rose by a modest 40 basis points, despite leading the metro in supply growth over the 12-month span ending in March. 

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