Vanir Tower Re-activated

After sitting dormant for over 18 months, the Vanir Tower has been “re-activated” with the city Planning and Design Commission. The Vanir Group is hoping to go to the Planning and Design Commission in June or July of this year for review and comment.

This proposal has been considered inactive by the city since at least November of last year, nearly one year after the original plans for the tower were withdrawn to make minor modification.  About a week after I made the post about its inactive status, the Vanir Group made local headlines, saying the proposed tower could get taller because of interest from potential tenants.

The Vanir Group did not respond to my request for comment.

Vanir Tower Could Go Taller?

According to the Sacramento Business Journal, the Vanir Tower could go taller. Really? Seems far fetched to me considering they have not spent one cent to start the entitlement process with the city in the year since the the tower was proposed. What's also strange is that the Vanir Group says that entitlement process will take at least two years when in reality it should take no longer than 9 to 12 months.

I've been watching this whole developer/proposal/publicly/flame-out process in Sacramento for over 30 years now and so far this proposal sounds no different than many other developers who stalled out but told the public a different story. I'm using history as my guide, but I hope I'm wrong. The comments I received from my last post about this tower were pretty brutal, one guy told the developer to put your money where your mouth is... maybe they will now?

Vanir Tower Project "inactive"

Proposed Vanir Tower at 601 J Street - Sacramento, CA

As of yesterday, the Vanir Tower project has not submitted any revised plans to the city after withdrawing them shortly after November of last year. A city planner has labeled the project as "inactive" because they haven’t worked on the project for several months. In my opinion, this is a big indicator that despite being located across the street from new Golden 1 Center, the downtown office market vacancy rate is still to high to absorb a project of this size.  Colliers-Sacramento predicts that Class A asking rates will increase 4% year-over-year due to activity surrounding the Golden 1 Center. As of the end of the third quarter, there is currently 813,617 SF vacant class A office space in downtown and another 586,408 SF vacant class B office space open. Combined, that’s about the size of 3 ½ 25 story towers vacant in downtown. Even with all the improvements the market has shown from several years ago, actual rents are not currently at a level high enough to justify new construction.