cnmAdmin2030, Author at TRI Commercial Real Estate Services

Jim Wirth, Senior Vice President of TRI Commercial/CORFAC International in Roseville, recently earned the internationally recognized Accredited Land Consultant (ALC) designation from REALTORS® Land Institute.

The Sacramento retail market fared well at the close of the third quarter as transaction activity remained strong. While vacancy rates increased, net absorption remained positive for the tenth consecutive quarter.

The Sacramento industrial market closed out the third quarter of 2018 with vacancy at an all-time low of 4.20% and positive net absorption of a little over 420,000 square feet.

The Sacramento office market fared well during the third quarter of 2018 as vacancy rates continued to decline, ending the quarter at 10.19%. As of the end of the third quarter, average asking lease rates were at a $1.98/SF, unchanged from the previous quarter.

Amid a flurry of pre-leasing and declining vacancies, rents remain high despite a significant slow down in absorption. For the first time in more than two years, absorption north of Market surpassed SOMA.

The San Francisco office market continue to absorb large blocks of space as soon as they come on line. This amounted to approximately 2+ million square feet absorbed during the 2nd Quarter, or 3.7 million from the beginning of 2018. The South of Market submarkets contributed almost 90% of the positive absorption with 1,842,027 square feet.

In comparison to the previous quarter, the vacancy rate decreased to 4.31%, which remains the lowest vacancy rate seen to-date for the Sacramento Region. At the end of the second quarter, the average asking triple net lease rate for the Sacramento industrial market was $0.52, which is a $0.05 increase from the previous quarter. Transaction activity at the close of the second quarter was 6.22 million square feet, which is an increase from the previous quarter’s figure of 3.88 million square feet. Six industrial projects are currently under construction in the Sacramento market. The largest of those projects is a 65,300 square foot Class B industrial building in the West Sacramento submarket expected to be delivered June 2019. Overall, the Sacramento industrial market has out-paced other commercial property types with an impressively low vacancy rate and increasing lease rates.

At the close of the second quarter, the vacancy rate was 6.66% and still remains amongst the lowest vacancy rates seen since 2008. Overall, the vacancy rate has decreased by 3.48% in comparison to one year ago while lease rates have increased by 9.09% in comparison to one year ago. The Sacramento retail market delivered 31,820 square feet of new retail space during the second quarter of 2018. Among the largest of those projects was a 21,000 square foot power center building in Rocklin for HomeGoods, which was delivered June 2018. There is currently just over 475,000 square feet of retail space under construction. The largest project under construction is a 150,000 square foot center in Elk Grove for Costco expected to be delivered February 2019.

At the close of the second quarter, the average asking full service lease rate for the Sacramento office market was $1.98/SF, which is a $0.07 increase from the previous quarter and a $0.13 increase from one year ago. The vacancy rate decreased modestly by 5 basis points to 10.35%, which still remains among the lowest vacancy rates seen since 2002! Currently, there are 579,276 square feet of office space under construction in the Sacramento Region. Of the eleven office buildings currently under construction, five of them are located in the Roseville/Rocklin submarket.

Three Oakland office towers are bought by East Coast investors for $494 million. “This is a good long-term vote of confidence in favor of downtown Oakland,” said Edward Del Beccaro, an executive vice president with TRI Commercial, a real estate firm.

Jim Wirth Earns Accredited Land Consultant Designation

DRE Broker #:00532032