Sacramento Retail Market Report

Return-to-office policies poised to support downtown retail. While Sacramento’s metrowide retail vacancy rate has not posted a year-over-year decline since 2021 — leaving the metro with the fifth highest vacancy level among major U.S. markets entering 2026 — early signs of stabilization are emerging. The California state government’s return-to-office mandate requiring at least four days per week on-site is scheduled to take effect in the second half of the year. If implemented as planned, this should provide a meaningful boost to downtown foot traffic, supporting retail absorption that remained tepid last year. At the same time, Sacramento continues to benefit from steady population growth, in contrast to trends in many coastal California markets. More than 80 percent of this year’s retail deliveries are already pre-leased and largely concentrated in big-box projects such as a Costco in Roseville and a Whole Foods in Elk Grove. That means incremental supply pressure will remain limited, setting the stage for near-term improvement in retail fundamentals across the metro.