Sacramento Office Market Report
Sacramento’s office market continued showing signs of stabilization in the second quarter. The total vacancy rate decreased just 20 basis points over the quarter to 15.8%, continuing the decline from the vacancy rate of 17.3% a year ago in the second quarter 2025. Availability dropped 40 basis points to 19.4%, a drop of 160 basis points from one year ago. Net absorption was 139,554 square feet, bouncing back from the negative 317,080 SF from the first quarter. Leasing activity in the second quarter remained steady compared to last quarter but is the lowest since the second quarter of 2021 as occupiers appear to still be waiting on the sidelines as they wait out recent fluctuations in the overall market.
Sacramento Industrial Market Report
The industrial vacancy rate stood at 5.4% at the end of the second quarter, down 50 basis points over the first quarter and the same as one year ago. The slowing construction pipeline has allowed the Class A market to slowly drive down vacancy, though the contracted lease rates were still lower than developers anticipated. Absorption was 718,329 square feet in the second quarter. Class A warehouse absorption was 857,599 square feet. In the face of much market uncertainty, the second quarter leasing totals were better than expected. The amount of sublease space on the market has increased by 43% over the past year, and it now totals just under 2.4 million square feet. Sublease space is no longer concentrated in 2-3 submarkets. The construction pipeline dropped off in in recent years given the weakness in market fundamentals as well as the lending environment.