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Market Report

Sacramento Office Market Report

4Q 2023

Public/Private Move-Ins Offer Differing Operator Outlooks;
Mid-Tier Asset Performance Improves

Office demand begins to stabilize. A number of government agencies are re-entering the marketplace following lease expirations early on in the pandemic, in some cases moving into long-planned expansions or relocations. While this trend contributed to less net space relinquished in the first half of 2023, overall, the state intends to consolidate the amount of office space it leases by more than 1 million square feet across California. Still, this returning office utilization may serve as an example for private organizations locally. Over the latter half of the year, lease commitments by consulting, insurance and law firms will help lift Sacramento’s quarterly office absorption into positive figures, prompting vacancy to stand just 20 basis points above its 14.8 percent historical average by year-end.
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