Q2 2023 Sacramento Industrial Market Report

Sacramento’s Industrial market remains solid with 3.3 million square feet of net absorption and 2.9 million square feet currently under construction. Vacancy rates are up by 0.1 percent year-over-year to 4 percent which is on par with 2021. New Development only represents 1.5 percent of total inventory versus 3.2 percent nationally, meaning that new supply will likely not push up vacancies as demand slows.

Stockton continues to be a major distribution hub with its location just east of the Bay Area, and a favorite for food companies, 3PL users and E-commerce. The capital city is also home to more than 2.4 million residents, putting it in a prime position to serve both its own residents and larger markets in the nearby Bay Area. Despite strong fundamentals, there is evidence of slowing demand. Leasing activity reached 2.2 million square feet in the second quarter of 2022 compared to only 1.3 million square feet a year later.