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Tuesday, February 7, 2012
Sacramento Office Market Favoring Tenants
by William Gallahue, published on October 14, 2009 at 2:35 PM
Storyline: Sacramento Office Space
Community Tags
business
commercial real estate
economy
financial
housing market
office space
real estate
Sacramento's office space market will continue to favor tenants as vacancy rates increase and businesses consolidate existing office space. That combination is allowing prospective tenants to negotiate deals that may not have been possible before the economic downturn.
According to Reid Boggiano of Sacramento Tenant Advisors, companies looking for class B or C office space will be able to get deals and allowances that weren't possible during the economic boom.
"It hasn’t been this much of a tenant’s market in Sacramento for a good many years," said Boggiano. "Right now we are negotiating rent reductions and generous tenant improvement allowances that we wouldn't have imagined only a few years ago."
Even businesses that aren't looking to expand might be able to save money by renegotiating an existing lease. Companies that leased space when rates were at their peak, can cut their costs by up to $0.15- $0.25 per square foot depending on their requirements and landlord's willingness to deal. It is generally cheaper for building owners to keep existing tenants so many landlords will be receptive to negotiating new deals.
Below is a list of major submarkets in Sacramento with asking rates for office space. These prices do not necessarily represent the lowest rate in each market, rather they show the general asking rates for their respective markets and may be higher or lower depending on your company's requirements.
Arden
Starting Rates: $1.20/Sqft/Month NNN
Class A Starting Rates: $1.85/Sqft/Month Full Service
Auburn
Starting Rates: $1.00/Sqft/Month Modified Gross
Class A Starting Rates: $1.83/Sqft/ Month Full Service
Cal Expo - Point West
Starting Rates: $1.20/Sqft/Month NNN
Class A Starting Rates: $1.90/Sqft/ Month Full Service
Carmichael
Starting Rates: $1.20/Sqft/Month Modified Gross
Class A Starting Rates: $1.80/Sqft/ Month Full Service
Davis Office Space
Starting Rates: $1.30/Sqft/Month Modified Gross
Class A Starting Rates: $1.90/Sqft/ Month Full Service
Del Paso Office Space
Starting Rates: $1.25/Sqft/Month Modified Gross
Class A Starting Rates: $1.80/Sqft/ Month Full Service
Downtown
Starting Rates: $1.25/Sqft/Month Modified Gross
Class A Starting Rates: $1.87/Sqft/ Month Full Service
East Sacramento
Starting Rates: $1.20/Sqft/Month Modified Gross
Class A Starting Rates: $1.90/Sqft/ Month Full Service
El Dorado Hills
Starting Rates: $1.10/Sqft/Month NNN
Class A Starting Rates: $1.87/Sqft/ Month Full Service
Elk Grove
Starting Rates: $1.20/Sqft/Month NNN
Class A Starting Rates: $1.90/Sqft/ Month Full Service
Fair Oaks
Starting Rates: $1.15/Sqft/Month NNN
Class A Starting Rates: $1.80/Sqft/ Month Full Service
Fairfield
Starting Rates: $1.35/Sqft/Month Full Service
Class A Starting Rates: $1.90/Sqft/ Month Full Service
Folsom
Starting Rates: $1.30/Sqft/Month Modified Gross
Class A Starting Rates: $1.90/Sqft/ Month Full Service
Fulton
Starting Rates: $1.20/Sqft/Month Modified Gross
Howe
Starting Rates: $1.30/Sqft/Month Modified Gross
Class A Starting low as $1.80/Sqft/ Month Full Service
Laguna
Starting Rates: $1.20/Sqft/Month NNN
Class A Starting Rates: $1.85/Sqft/ Month Full Service
McClellan
Starting Rates: $1.00/Sqft/Month NNN
Midtown
Starting Rates: $1.25/Sqft/Month Modified Gross
Class A Starting Rates: $1.80/Sqft/ Month Full Service
North Natomas
Starting Rates: $1.30/Sqft/Month Modified Gross
Class A Starting Rates: $1.80/Sqft/ Month Full Service
Placerville
Starting Rates: $1.15/Sqft/Month NNN
Rancho Cordova
Starting Rates: $1.15/Sqft/Month NNN
Class A Starting Rates: $1.75 Sqft/ Month Full Service
Rocklin
Starting Rates: $1.30/Sqft/Month Modified Gross
Class A Starting Rates: $1.90/Sqft/ Month Full Service
Roseville
Starting Rates: $1.25/Sqft/Month Modified Gross
Class A Starting Rates: $1.85/Sqft/ Month Full Service
South Natomas
Starting Rates: $1.40/Sqft/Month Modified Gross
Class A Starting Rates: $1.75/Sqft/ Month Full Service
South Sacramento
Starting Rates: $1.10/Sqft/Month NNN
Vacaville
Starting Rates: $1.25/Sqft/Month NNN
Class A Starting Rates: $1.85/Sqft/ Month Full Service
West Sacramento
Starting Rates: $1.10/Sqft/Month NNN
Class A Starting Rates: $1.80/Sqft/ Month Full Service
Woodland
Starting Rates: $1.00/Sqft/Month NNN
Class A Starting Rates: $1.80/Sqft/ Month Full Service
Yuba City
Starting Rates: $1.20/Sqft/Month NNN
Class A Starting Rates: $1.75/Sqft/Month Full Service
Conversation Express your views,
debate, and be heard with those in your area closest
to the issue.
bbbbmer
October 15, 2009 | 7:12 AM
One suggestion -- offer a buck / sq ft -- chances are, these days, LL's will take it.... especially if you can do a long term lease, and can do your own maintenance... Some rent is better than no rent at all....
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bbbbmer
October 15, 2009 | 7:13 AM
...and avoid 'class a's if at all possible -- who needs all that marble???
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William Gallahue
October 15, 2009 | 8:29 AM
The rates in this article are general starting prices. Depending on the submarket, $1.00/sf/month rates may be available depending on your needs. Bbbbmer, as far as including Class A, I realize this is a community newspaper and not the WSJ but I simply wanted to contrast prices.
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bbbbmer
October 16, 2009 | 11:56 AM
I was just attempting a punch line... oh well...
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William Gallahue
October 16, 2009 | 3:58 PM
See now I get it
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thsas
edited on
October 16, 2009 | 8:59 PM
After 25 years of landlord rate increases, we have renegotiated about 80% of our spaces for lower rents. We are now being asked to take occupancy for free in some new strip centers, that sit empty. Sad that we need to deline those offers, because our stores will not survive without strong retail anchors. It is a wierd time, and I suspect that commercial property will be cheap for quite a while.
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