The Sacramento office market experienced a year-over-year decline of up to 13 percent for key submarkets as landlords began lowering prices and offering incentives in order to attract tenants. In addition with businesses downsizing or closing offices altogether, more space has come on the market which has helped to drive down prices even further.

The following section shows the year-over-year declines for the average price of space in key Sacramento submarkets. (The price range factors in specific location and class of space) :

Downtown - 2009 rates are 8 to 11 percent lower

El Dorado Hills - 2009 rates are 7 to 11 percent lower

Elk Grove - 2009 rates are 8 to 11 percent lower

Highway 80 Area - 2009 rates are 6 to 10 percent lower

Roseville/Rocklin - 2009 rates are 10 to 13 percent lower

While none of the major submarkets posted a gain in average price between 2008 and 2009, there is a silver lining for businesses that signed leases at higher rates. Depending on their individual lease situation, they may be able to negotiate for a lower rate if they are willing to renew their lease. However with the current market situation, many Sacramento businesses are apprehensive about making long-term commitments until the economy begins to turn around. Until that happens, prices for office space in Sacramento will likely go even lower.

Data Source: Synergy Real Estate Group