HUGE INVESTMENT, INCREDIBLE ABSORPTION AND THE MARKET GETS TIGHTER

Absorption during 2017 is on pace to exceed the total from the peak of the last economic cycle in 2005. Record absorption is happening in spite of an already-low vacancy rate. With large scale retailers reportedly searching for Class A distribution space, we expect more build-tosuit projects on the horizon. Lease rates have risen substantially, making speculative development more feasible. However, the devastating wildfires in Northern California will draw from our limited supply of building contractors, causing an increase in construction costs. The City of Sacramento issued the first conditional use permits for cannabis growers during last quarter. With all this activity and such strong market forces at work, investment in Sacramento’s industrial real estate has never been so high.