Colliers Sacramento Office Snapshot: Q2 2024

I’m a little slow on getting this posted, but ColliersSacramento Q2 office market report shows several challenges that appear show a trend for the region. As stated in Q2 2024 Sacramento Office Market Report, Sacramento’s office market maintained its trajectory toward setting a record high vacancy rate later this year. Downsizing and consolidation has pushed the market towards record high vacancy rate. There was a negative absorption of -140K sf in the quarter with more planned in the next 12 months with multiple large vacancies slated for the second half of the year (read more under Absorption & Demand).

But on a positive note, Capitol Mall’s properties are recording significant occupancy gains through the first half of the year. 400 Capitol Mall went on the market for sale this quarter and will test buyer demand for stabilized Class A high rises.

Colliers forecast that the State of California’s return to office this summer, two days a week will increase foot traffic in the urban core. The Sacramento office market has been downsizing for the last four years. With the lack of demand, local office inventory will likely diminish in years ahead. There are approximately 1 million square feet of office properties being evaluated for conversions to alternative uses, including medical office, apartments and hotels.