Colliers Sacramento Office Snapshot: Q4 2025

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.

UC Davis Medical Center California Tower

UC Davis Medical Center California Tower construction

The 14-story hospital tower is now four years into construction and is expected to be completed in 2030. As you can see from my pictures, the steel frame has made quite an impact on the skyline of the UC Davis Medical Center campus.  

UC Davis Medical Center California Tower construction

UC Davis Medical Center California Tower construction

UC Davis Medical Center California Tower construction

Construction of California Tower seen from Yolo County CR102

Construction of California Tower seen from Yolo County CR102

Sacramento Skyline seen from Yolo County CR102

Colliers Sacramento Office Snapshot: Q3 2025

We have now seen two consecutive quarters of declining vacancy and positive absorption in the Sacramento office market. Colliers International is reporting that available supply is shrinking and downtown’s Class A vacancy rate has been held below 20% throughout 2025. This report by Colliers also discusses the office market recalibration in downtown, including the disposal of the 25-story state office building at 450 N Street that has been defective for decades with the state spending approximately $60 to $100 million trying to repair the never ending problems. Also being considered is turning three state properties along Capitol Mall into mixed-use Sacramento State event spaces.

Build the Republic FC Stadium, Even Thou Tax Money Fell Through

Right now appears to be the closest the proposed stadium has ever been to actually starting construction. A few weeks ago local residents successfully blocked the expansion of a special taxing district (designed to fund infrastructure around the stadium) but the city plans to move ahead with the project and figure out which tax money to use later. With residents and labor advocates successfully halted the expansion of a special taxing district intended to spur development in the Railyards, the Sacramento Republic FC said they remained committed to building a new stadium in the area.

Earlier this week a formal ground breaking at the Railyards site near North B and 7^th Street which was lead be Witlon Rancheria. The $175 million soccer stadium could be ready for play by the 2027 season. The Sacramento Republic FC has declared that this time it will really get built. 

Remember when... 201 N Street Is For Sale

Lot X Sacramento - 201 N Street

It was only three years ago a mixed use high-rise was going to be built at 201 N Street. At one time it was to be 28-storys, and then later increased to 32 stories. Then last year around August the proposal was put on hold... and you know the rest of the story. The land is now for sale, 2.5 acres by the developer Southern Land Company and the asking price is $19.9 million. I wonder if the city of Sacramento had offered to subsidies this residential high-rise it could have been financially feasible? I am not surprised this was canceled, history has shown us again and again that Sacramento currently can't build a residential building over eight floors and be successful. These aren't my rules, this has been proven over and over again in the last several decades. The only exception to the rule is Penthouses at Capitol Park apartment built in 2007 above the Residence Inn Sacramento Downtown at Capitol Park. The top three floors of the fifteen story building is residential, maybe future proposals should consider this method instead of above above offices or one hundred percent residential. I hear the city is looking to also increase hotel rooms near the Golden One Center. Turton Commercial Real Estate 

The Elks Tower

The Elks Tower 921 11th Street, Sacramento

The Elks Tower is currently for sale asking $9.9 million. It’s considered Italian Renaissance Revival high-rise at 14-stories and 110,468 square feet. It’s considered a landmark building and a historic structure and when it was completed in 1926 at a cost of $1.5 million. Standing at 242 feet tall, it is taller than the California State Capitol by five feet.  

Colliers Sacramento Office Snapshot: Q2 2025

Colliers Sacramento Market Fundamentals

In looking at market indicators provided by ColliersSacramento, it appears to show that office downsizing and vacancy levels have leveled off. For the first time in several years, net absorption was positive. I hardly believe all is well again after only one quarter of optimistic demand, but overall activity appears strong with demand and rents and the State of California’s four day return to office in July 2026 has also provided some hope. The Colliers report shows a fragile office market, but several of the graphs show a hint of promise of recovery in the near or distant future.

Colliers Sacramento Historic Comparison