2020 Q3 Sacramento Office Market Report

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More than seven months into the COVID-19 pandemic, most office workers are still working from home, but the lasting viability of remote working remains to be seen. The Sacramento region’s market vacancy rate increased 10 basis points quarter-over-quarter almost entirely due to more than 136,000 square feet of vacant sublease space hitting the market. The amount of available sublease space across the market increased 73 percent since the end of March to 962,393 square feet, the highest level seen since Q2 2009. However, market average asking rents continue to hold firm, increasing 0.5 percent from the second quarter and 3.0 percent year-over-year. Sales activity picked up slightly from the previous quarter with seven transactions of $12 million or more closing during the third quarter. Investors in the market for affordable, quality, and stabilized assets have found numerous offerings across Sacramento. There will be more market disruption next quarter as Centene is planning to start relocating to its new 540,000 square foot Natomas headquarters. In addition, many employers have indicated that their employees can work from home into 2021 or until a vaccine is widely available. It remains to be seen what, if any, concessions landlords will have to offer in the future as availability continues to rise. 

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2020 Q3 Sacramento Office Market Report

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Kris Reilly

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Kris has 17 years of experience in commercial real estate. He is focused on Office Leasing and Sales in the greater Sacramento market. He and his team have recently completed more than $40 million in transactions.

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