Q3 2023 Sacramento Industrial Market Report
In 2023, Sacramento’s industrial market remains solid but is slowing, evident in a 1 million square foot drop in leasing activity year-over-year. Net absorption is at 2.9 million square feet, with 4.6 million square feet of new space coming, pushing vacancy rates to 4.6 percent. Rents rose by 6 percent in the past year to $11.14 per square foot/year but may decline with rising vacancies. Stockton’s industrial market thrives due to its Bay Area proximity, attracting major players. Net absorption in the past year was 3.1 million square feet, exceeding 2 million square feet annually since 2015. Deliveries in the last 12 months were 4.7 million square feet, resulting in a 6.7 percent vacancy rate and strong 5.4 percent rent growth.
Deliveries of 3.1 million square feet have been completed over the past year, and another 3.2 million square feet are underway. The result is a slight upward pressure on the vacancy rate. Sacramento faces little oversupply risk from new construction. The 3.2 million square feet underway equates to only 1.7 percent of total inventory.
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