Sacramento Industrial Market Report
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.