SPEC CONSTRUCTION IN SOUTH NATOMAS AND WEWORK COMING TO CAPITOL MALL
Sacramento’s office market is on track to post another strong year despite the first quarter’s negative absorption. The market vacancy rate ticked up 10 basis points since the end of 2018, but there were a number of new leases signed last year that will drop the vacancy rate over the next three quarters. Downtown’s Class A market remains especially tight as average asking rates have ticked up $0.15/SF in the last twelve months and the vacancy rate has fallen to its lowest point since Q1 2008. With momentum building at the Railyards and WeWork taking down the last large block on Capitol Mall this quarter, LDK Ventures’ two proposed buildings in between 5th & 6th on Railyards Blvd will be the next option for Downtown tenants looking to relocate or expand. After the Ice Blocks leased up last year, Bannon Investors started construction on a 90,000 square foot speculative office development in South Natomas, which has been below 10 percent vacancy for the last 21 months.