ANOTHER BIG YEAR FOR INVESTMENT AS OVERALL FUNDAMENTALS HOLD STEADY
As 2017 came to a close, the Sacramento market reached the lowest unemployment rate in 17 years. The vacancy rate has held steady at pre-recession levels, yet we are not seeing a significant increase in speculative development. The silver lining in the lack of new construction is an increase in activity from institutional buyers, motivated by an assurance that existing Class A properties will have limited competition from new product in the next 18 to 24 months. For the second year in a row, office sales totaled more than $1 billion. In the coming year, we expect to see lease rates rise steadily overall. The demand for quality office properties that appeal to the millennial workforce will drive the largest rate increases in urban areas and Class A suburban office parks.