Sacramento Office Market Report
Vacancy rate remained the same as the previous quarter at 15.9% for the fourth quarter. Tenant demand increased 60 basis points quarter-over-quarter although is still lower than pre-pandemic levels. Leasing activity slowed down in the fourth quarter as many occupiers continued to assess space needs and operating budgets. While some organizations opted to renew leases, others may have simply delayed making a move as they wait for more economic clarity thus leaving room for a potential rebound as deferred deals re-enter the pipeline in 2026. Sacramento’s 2025 office market has seen fluctuations but landed with net positive absorption of 341,876 SF for the year. Vacancy staying below historical norms and occupancy strengthening over the previous two years suggest a continued but gradual stabilization of the market.
Download Sacramento Office Market Report 4Q25Sacramento Industrial Market Report
The industrial vacancy rate stood at 6.3% at the end of the fourth quarter, up 40 basis points over the third quarter. Absorption was -288,494 square feet in the fourth quarter but still ended 2025 with positive absorption at 175,412 square feet. Industrial average asking rents held steady $0.79/SF NNN which is the same as one year ago. Industrial sublease supply has accelerated sharply since the third quarter of 2020, closing 2025 at 3.3 million square feet. Occupiers are recalibrating post-pandemic footprints, monetizing excess capacity via subleases. At the same time, new construction deliveries of 2021-2022 introduced a deeper pool of modern, move-in-ready product, further amplifying sublease availability.