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Market Report

Sacramento Office Market Report

Second Quarter 2019

Private Sector Expansion Reduces Vacancy; Investor Confidence Holds Amid Listings Drop

 
Tenant demand is strong in core Sacramento and Roseville. Entering the second quarter of 2019, Sacramento’s vacancy rate was 140 basis points lower than the national mark, a rare occurrence for the market. While the government is the driving force behind tenant office demand, growing momentum from the private sector, namely medical, professional services and most recently coworking firms, is supporting strong absorption. Penumbra, a medical device company, executed one of the largest new lease signings in several years, agreeing to occupy 160,000 square feet in Roseville. In the metro’s core, WeWork signed a lease for two floors at the Wells Fargo Center, while Spaces, Electronic Arts and Accenture will fill newly built space in Midtown. This type of leasing velocity has reduced vacancy to a cyclically low level, pushing asking rents at a pace previously unobtainable in the metro.

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