By Mike Kirner, Senior Marketing Associate, NorCal
Earlier this summer, Cushman & Wakefield’s Sacramento researchers, brokers and staff collaborated on a comprehensive Landmark research publication offering a distinct perspective of the Sacramento Central Business District trends that have paved the way for a complete revitalization of the city.
According to commercial real estate veteran Ron Thomas, Managing Principal for the firm’s Sacramento office, “2016 was a banner year for Sacramento, as we saw the grand opening of the highly-anticipated Golden 1 Center and several other noteworthy projects that will truly redefine Sacramento to one of the most vibrant CBDs on the entire West Coast. I hope that this publication provides an insightful overview of the core Sacramento market and further manifests Cushman & Wakefield’s firm committed to the City of Sacramento and its surrounding region.”
Cushman & Wakefield Research Analyst Travis Zeiler was among the many people who worked on compiling the data in the report, whose findings have already been featured in stories by prominent publications including Bloomberg and Globe Street recently. Zeiler is pleased with the publicity regarding the report and the city he calls home:
” The attention the report has generated is like an invitation for Sacramento to step into the national spotlight . The stars are aligned correctly and I’ve frankly never seen more activity in the downtown area. This report has documented the frenzied, but strategic and organized CBD activity that is transpiring here and what we can look forward to in years to come.”
The Landmark study reports that Sacramento’s commercial real estate market enjoyed strong results in 2016. Office vacancy fell by 90 basis points to 11.4% from Q4-2015 to Q4-2016 for the entire Sacramento
MSA region, with vacancies in the core CBD dropping to single digits. Rental rates in Class A space continue to be very attractive, which has led to considerable interest by institutional investors in our core markets. One significant example of this was the sale of Wells Fargo Center, which was by far the largest office building sale of 2016, and the last decade, closing at $175.5M. Cushman and Wakefield was involved in the disposition and was retained as the leasing agency for the asset.
Retail, DOCO, Golden 1 Center
Retail continues its renaissance in the city, with several major developments currently underway. Essentially, the entire retail and restaurant experience in Sacramento is being redefined and repurposed. Downtown Commons (or DOCO), adjacent to Golden 1 Center, will add 280,000 of combined retail, hospitality, residential, and office space to the already burgeoning central Sacramento landscape.
Additional projects under construction include The Ice Blocks in Midtown, offering ±11,000 square feet (SF) of ground floor retail space, and The Sawyer Hotel by Kimpton, which will add 175,000 SF of hospitality space when the 16 story building is completed.