2018 Q2 Sacramento Industrial Report
Date Published: 07/24/2018
INDUSTRIAL MARKET IN SACRAMENTO ON PACE FOR ANOTHER YEAR OF RECORD ABSORPTION Sacramento’s industrial market continued at a rapid growth rate with another impressive quarter of absorption. Tenants continue to pay rising rents due to lack of available space as landlords increase rents quarter after quarter. With the market as tight as it’s ever been, developers view these market fundamentals as prime conditions for speculative development, demonstrated by the more than 750,000 square feet in West Sacramento’s Southport Business Park and McClellan Park’s 417,214 square foot distribution center both breaking ground in the third quarter. High demand and decreasing vacancies are spurring an uptick in development. However, only 861,788 square feet of new supply delivered in the first half of 2018 while total net absorption totaled 2.86 million square feet during that time. Reluctant owners are coming around to selling during this hot market as buildings are being purchased for record high prices. With multiple 500,000-plus square foot tenants still circling for space as well as heavy demand for smaller spaces and an inadequate amount of available product, the Sacramento market shows no signs of slowing down anytime soon.