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| Proposed 26 story high-rise at 601 J Street |
If I did not know better, it's been feeling like 2006 all over again. Lots of big plans, and when I say lots, I mean way beyond what the city can absorb. But I digress. Last week Vanir Development Co. Inc. submitted plans to the city for a 26-story office tower (377 feet tall) on J Street across the street from the planned downtown arena and hotel. The Sacramento Bee reports that it’s a class A office building and hold 372,000 square feet of office space.
As much as I love the idea of a high-rise and more construction in downtown, this one does not make sense to me. According to Colliers-Sacramento, there is over 1 million sf of vacant office space in (CBD) and 2 million in downtown. That's the size of four 25 story office buildings. Unless Vanir Development Co. Inc. plans to build on speculation like 500 Capitol Mall did, I don’t see how this will pencil out? At one time 621 Capitol Mall was proposed at 31 floors, but for 6 years developer David Taylor could not find enough tenants to fill it so banks could loan him the money to build. A certain percentage of square feet in a tower need to be leased out before monies are released to build. So Taylor shortened the tower to 25 floors so that it could meet loan requirements with the tenants he had already secured over a six year period.
What’s
interesting about this site is that the current building at the proposed site
has been empty since 2009. Bank of the West moved to 500 Capitol Mall when
their lease was not renewed and were told a high-rise was being planned for the
site. The timing did not work out and the site has been sitting empty ever since.
Here’s what they had in mind back then... Link
If Vanir Development can't build using their own money, the developer won't be able to break ground until 50 percent of the office space is pre-leased. Those are standard lending laws for building skyscrapers in the US. Who do they think they can get to fill 186,000 sf?
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