Sacramento Office Market Report
Sacramento’s office market continued showing signs of stabilization in the third quarter. The total vacancy rate increased by just 20 basis points over last quarter’s rate of 15.7% landing at 15.9% but still remained well below the 20-year average and has remained stable for the previous four quarters. While availability increased by 20 basis points to 19.4%, it remained 130 basis points lower year-over-year. Leasing activity eased modestly in the third quarter as many occupiers paused to reassess needs amid recent market shifts. As the return-to-office trend continues we anticipate leasing momentum to see an upturn in future quarters. After showing signs of stabilization in the second half of 2024, Sacramento’s 2025 office market has seen fluctuations but landed with net positive absorption of 382,834 SF year-to-date.
Download Sacramento Office Market Report 3Q25Sacramento Industrial Market Report
The industrial vacancy rate stood at 5.9% at the end of the third quarter, up 40 basis points over the second quarter. Absorption was -449,208 square feet in the third quarter but still in the positive year-to-date at 504,760 square feet. Industrial average asking rents stayed the same as the previous quarter at $0.80/SF compared to $0.79 /SF one year ago. The amount of sublease space on the market has increased by 48% over the past year, and it now totals 2.7 million square feet. Sublease space is no longer concentrated in 2-3 submarkets but has expanded throughout the region. The construction pipeline dropped off in in recent years given the weakness in market fundamentals as well as the lending environment.