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Sacramento’s office submarkets are strong as the market rides high demand and dwindling supply

  • ​Ten of twelve submarkets have experienced positive annual rent growth with seven of twelve submarkets recording +2.5% positive growth. With fewer availabilities in many submarkets, the region’s vacancy rate has dropped a full percentage point since the end of 2016, giving many landlords a case to hike rents with new speculative supply still far out on the horizon. 
  • Suburban submarkets have seen the biggest absorption numbers over 2017. Both Folsom and South Natomas experienced over 125,000 SF of net absorption through the first three quarters of 2017. While 2016 is unlikely to match 2016’s absorption total of more than 1.25M SF, strong leasing activity should continue throughout the remainder of this year and scheduled Q4 move-ins will help boost 2017’s total absorption closer to 1M SF.
  • Demand in the CBD has lessened somewhat in recent weeks though year-to-date absorption is still nearly 80,000 SF greater than Q3 2016. Class A rents downtown should rise and bump up to nearly $3.00/SF by the start of 2018. ​

Source: JLL Research​

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