The 21% office vacancy rate persists but the market continues
to show stability compared to previous years.
Colliers International posted these
vacancy numbers… downtown had another tough year with -331k SF of net
absorption. Though Downtown’s vacancy rate of 23.7% was above the regional
average, roughly 30% of the vacancy is clustered in three buildings, and
Downtown’s Capitol Mall Class A vacancy rate (five buildings totaling 2.1M SF)
was a healthy 14.7%. South Natomas (-154k SF) and Point West (-127k SF) also
recorded significant occupancy losses this year. Highway 50 East has the
highest vacancy rate at 32.7%
In addition, Colliers also mentioned a more complicated
adaptive reuse is planned at 700 J Street, where Hume Development recently
applied for building permits to convert a 92,000 SF office building into the
95-room Hotel Eleanor. Staying Downtown, the State of California wrapped up the
$490 million renovation of the former Resources Building at 1416 Ninth Street.
The 17-story, 657,000 square foot tower will house the Employment Development
Department, which will be moving out of its longtime Capitol Mall offices.
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