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

State Capitol Annex Project

Capitol Annex construction looking south from L Street

The new California Capitol Annex building will have 537,444 square feet of floor space over 8 stories at a cost of $1.3 billion and counting. Demolition was completed of the 1950's in 2023 on the East side of the Capitol building, which housed the Governor's office and legislator offices. The project’s plans include a new annex and an underground visitor center on the west side of the Capitol and an underground parking garage on the southern side.

Capitol Annex construction looking south from L Street

Rendering of how Capitol Annex could look

Rendering of how Capitol Annex could look

Rendering of how Capitol Annex could look

Rendering of how Capitol Annex could look

UC Davis Medical Center’s California Tower

Looking north from 45th St. on the medical center campus

On the eastern side of the existing UC Davis Medical Center, two tower cranes are in place to construct the 14-story hospital tower. At a total construction cost of $1.2 million (project cost: $3.7 billion), the building will connect to the existing Surgery and Emergency Services Pavillion to over 909,000 square feet of space in the new structure. When completed in 2030, the project will have a total of 334 beds, intensive care, and medical/surgical bed types; 12 hybrid operating rooms; and two rooftop helipads.

Looking east from Stockton Blvd. and X St.

Looking west at 45th and X Streets

Seen from Hwy. 50 and 65th St. looking west

Seen from Hwy. 50 going east