Colliers Sacramento Office Snapshot: Q2 2023

The Sacramento vacancy rate has hit 20% with a negative net absorption of -279,278 square feet. Sales appear to also be down because of higher barrowing costs. As reported by Colliers Sacramento, the local unemployment rate was 3.9 in May with employed persons at 1.09 million, but local layoffs have stated to increase so far this year.

As of June 2023, there were only 13 office buildings in the Sacramento region that were potentially troubled, in special servicing, or in foreclosure, totaling 1.68 million square feet of space and $163 million in loan value, according to MSCI Real Capital Analytics, which equates to less than three percent of the office market. Through Q1 2023, some $4.1 billion of new office assets were added to the troubled group of office properties nationally and more loans are set to mature in the office sector than any other asset class.

The Judicial Council of California’s new Sacramento County Courthouse located on the southeast corner of The Railyards north of Downtown will be completed in the next nine months. North of The Railyards, the State of California’s 1.25 million square foot Richards Boulevard Complex in The River District is due to be completed by Q1 2024. This project will kickstart the consolidation of multiple state government departments into these brand-new buildings and is expected to be a catalyst for ongoing development in this emerging mixed-use district. CalSTRS’ new building at 200 Waterfront Place is due to deliver in Q3 2023, which will bring 200,000 square feet of available space in its current 100 Waterfront Place building into the vacancy column.