Q1 2024 Sacramento Industrial Market Report

Sacramento’s strategic location at the intersection of interstates 5 and 80 makes it a prime logistics hub, serving both local and Bay Area markets. Despite a 6.1 percent vacancy rate, below the 10-year average, leasing activity slowed by 30 percent in 2023. Construction is ongoing, with 1.3 million square feet under construction, expected to expand inventory by 0.7 percent. Rents rose by 5.2 percent, reaching $11.29 per square foot, which is comparable to national figures.

Sales activity remains steady at $619 million, with sale-leasebacks prominent in completed deals. More broadly, the national trend for industrial transactions has shown a decrease in square feet traded, after elevated levels in 2021 and 2022. Notable deals in the Sacramento metro include Public REIT Real Income Corp’s acquisition of two Walgreen’s warehouses totaling 710,000 square feet for $97.7 million ($138 per square foot).

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