Newest articles on The Sacramento Press tagged as "office space"

Retro Lodge owners face challenge

2010-04-16T02:57:41Z

The owners of the office complex called Retro Lodge are continuing bank negotiations in an effort to prevent the property's sale.

The $2.5 million loan balance is now several months past due, which led Bank of America to schedule trustee sales at least twice this month. But developer Heller Pacific and partners haven't given up on trying to get a loan extension after converting a former downtown Travelodge into one of the city's most creative adaptive-reuse projects, a block away from Sacramento City Hall.

The bank agreed to postpone a sale scheduled for Thursday while the partners are deep in talks with them. The project, which received no public subsidies, began taking tenants in 2008 just as the decline in the local real estate market quickly worsened, said Heller Pacific President Michael Heller Jr.

"We put every ounce of our passion into that project," Heller said. "Sometimes in life you face things beyond your control: One is an unusually challenging economy where it's hard to find tenants; two is a big bank that calls the shots."

The idea behind the 49-office complex was to create a kind of incubator for small business owners who want to have space downtown but without the usual long-term, high-priced leases. Office sizes range from 300 to 700 square feet, at $595 to $1,595 per month, said Andy Eckstrom, project manager for Heller Pacific.

The property's two buildings, which are named Astro and Elroy after The Jetsons cartoon characters, retain their mid-20th century modern design. With its lush fan palms, multi-story balconies and outdoor seating areas, Retro Lodge invokes a Palm Springs motel-turned-funky office building vibe.

The pioneering concept has gained traction. Retro Lodge is 57 percent leased with 28 tenants. While not the figure the owners want, that's more than double the number at the same time last year.

Tenants like Terrence Aguas and David Nybo credit the casual vibe, the layout and leasing staff with helping to make the concept work. Both have found plenty of networking opportunities just by keeping their doors open, hanging out on the balcony to handle a business call and being friendly with neighbors.

Aguas, who is a senior mortgage banker, and his partner, real estate broker Amir Cackovic, moved into Retro Lodge five months ago after starting a sustainability-focused company, American Green Realty.

Now they plan to do their outdoor advertising with Nybo, their next-door neighbor, and to use their other next-door neighbor's branding and website design services. They were drawn by the "energy of the place" and the community they found at Retro Lodge, Aguas said.

"We help each other out. We bounce ideas off each other; we partner up together and look out for each other," he said. "It's inspiring."

Shared kitchens and conference rooms, as well as the opening of a Naked Lounge coffee house in one of the buildings, provide other common areas where tenants gather.

Retro Lodge offers a more open alternative to traditional shared office buildings, where everyone works behind closed doors, said Nybo, who's leased office space for his company, Primero Outdoor Media, since shortly after Retro Lodge opened.

"You work with your door open and people walk by your office every day," he said. "It's pretty special. There's so much interaction among the neighbors here."

But the property hasn't worked for everyone. Marty DeAnda, who owns the small record label Dig Music and manages singer/songwriter Jackie Greene, relocated to the Urban Hive in October because he needed to be in an area where clients could park more easily. He also said there were too few tenants in the Elroy to interact with.

"I have respect for those folks. For me, the people were professional and wonderful," said DeAnda, who leased space at Retro Lodge for a year. (But) "The parking was difficult in that part of town."

The dates for a possible sale have been extended once again because of the "continuing efforts to make this thing work," Heller said.

"It's a great community," he said. "Right now, what we need is more tenants."

Photos by Suzanne Hurt, a staff reporter covering business and development for The Sacramento Press.

Sacramento Office Market Favoring Tenants

2009-10-14T21:35:30Z

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

Sacramento Office Space Rates Decline

2009-03-30T23:49:53Z

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