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Market Report

Sacramento Industrial Investment Forecast

2022 Outlook

Sacramento Evolves Beyond a Local Service Market;
Metro's Enhanced Role in Supply Chain Attracts Capital

Vacancy remains regionally tight despite rapid stock expansion. Proximity to the Bay Area Central Valley and Reno paired with local population growth is motivating industrial users to establish or expand their presence in Sacramento. Robust demand for available warehouse and distribution space is demonstrated by metro vacancy compressing 80 basis points over the past two years to 3.4 percent despite the delivery of more than 10 million square feet — a volume of supply additions that eclipsed the prior 14-year total. An increase in 100000-square-foot-plus lease commitments by e-commerce firms suppliers and logistics providers is largely to credit for demand outpacing completions highlighted by the absorption of 7.5 million square feet last year. While notable inventory expansion continues in 2022 more than half of the 4.4 million square feet slated for delivery is accounted for. This will limit the impact of speculative space on overall availability allowing Sacramento to remain the tightest market in Northern California.
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