Q2 2020 Sacramento Market Report

In Q2 2020 Downtown Sacramento Class A and B office vacancy decreased to 7.2% and rents increased since prior period which coincided with onset of the coronavirus pandemic. Although vacancy levels have decreased slightly from Q1 2020, the vacancy in Sacramento still continues to trend below the tight national average. Today, space options continue to fall because of the ongoing demand for space and lack of new construction. Nationally there is a different story with vacancy rising and rates decreasing. In greater Sacramento about 2.6 million SF is currently under construction although nearly all projects are build-to-suits. The elephant in the room is the impact of remote working on the overall office market. However, the remote working trend is yet to be determined, and faces many challenges over the long term.