Forecast: Vacancies, Sales Prices Both on the Rise in Sacramento

SACRAMENTO-Sacramento’s office market is faring well, especially when compared to other markets across the state, according to a new forecast by Marcus & Millichap Real Estate Investment Brokerage Company.

The report indicates that an abundance of speculative development will push vacancies higher this year; however, investment activity remains strong and sales prices are forecast to increase by year’s end. “Sublease space, which has been the bane of many office markets, is not a major contributor to Sacramento’s vacancy rate,” says Robert Hicks, M&M’s regional manager. “Additionally, projected job growth this year will help fuel the local office market.” Total employment is forecast to increase by 1.2% by year-end 2003, according to the report.

Office construction completions in 2003 will total 1.7 million sf, the same as 2002, according to the report. About 30% of that total will be located in the Roseville/Rocklin submarket, and much of it will be speculative.