2020 office update...2020 office update alexis garrett. progress, progress! hilton home2suites ......
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2020 Office Update Alexis Garrett
Progress, progress!
HiltonHome2Suites
©2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. Jones Lang LaSalle Brokerage, Inc. Real Estate License #: 01856260
The RailyardsTwo office buildings with more than 300,000 SF of office space, ground floor retail and restaurant space, plus an urban plaza. Construction begins 2020.
2555 Natomas Park Drive3-story 90,000SF LEED certified building with free 4/1,000 SF parking. Completion is planned for August 2019.
Waterfront PlaceOwned by CalSTRS, Waterfront Place is a will have 6 floors, totaling 150,000 square feet available in the Fall of 2022. Waterfront Place is a 17 story, 409,000 square foot, LEED® Platinum building located on West Sacramento’s dynamic waterfront.
301 Capitol MallDeveloper CIM Group, in partnership with CalPERS, has proposed an 800,000 SF Class A high rise office development. It will feature ground floor retail, several floors of market rate apartments, parking and green space. Office floor plates ±25,000 RSF. Projected completion date is 2021/2022.
1800 3rd StreetOwned by CalPERS . This 4-story building has ±200,000 SF available for lease.
400 R StreetOwned by CIM and CalPERS. The first floor is available for lease ±35,000 SF.
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Fundamentals San Francisco Silicon Valley Oakland Sacramento
Inventory 78,743,933 s.f. ▲ 74,709,272 s.f. ▲ 12,030,944 s.f. ▲ 44,245,603 s.f. ▲
YTD Net Absorption 2,718,764 s.f. ▲ 5,277,433 s.f. ▲ 262,843 s.f. ▲ 771,051 s.f. ▲
QTD Net Absorption 374,419 s.f. ▲ 1,464,888 s.f. ▲ 187,738 s.f. ▲ 196,871 s.f. ▲
Under Construction 3,481,494 s.f. ▲ 5,629,720 s.f. ▲ 726,922 s.f. ▲ 90,000 s.f. ▲
Total Vacancy 5.2 % ▼ 11.6 % ▼ 11.5 % ▼ 12.1 % ▼
Total Vacant s.f. 4,094,684 s.f. 8,666,275 s.f. 1,383,558 s.f. 5,353,717 s.f.
Average Asking Rate $7.76 p.s.f $4.95 p.s.f $5.59 p.s.f $2.11 p.s.f
Northern California Market Fundamentals
©2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. Jones Lang LaSalle Brokerage, Inc. Real Estate License #: 01856260
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. 5
Sacramento Class A Submarket Stats – Q4 2019
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Sacramento Over the Last Decade
21.80% 21.80%22.50% 22%
19.40%18.40%
16%
13.20%12.20%
14.10%
12.10%15%13.50%
14.30%12.90%
18.70%
15.50%14%
11.60%
9.70%11%
6.30%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Sacramento Vacancy Rates
Sacramento Overall Vacancy Sacramento CBD Class A Vacancy
©2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. Jones Lang LaSalle Brokerage, Inc. Real Estate License #: 01856260
$2.05 $1.95
$1.85 $1.79 $1.86 $1.86 $1.92 $1.98 $1.99 $2.02 $2.11
$2.84 $2.73 $2.77 $2.70
$2.62 $2.59 $2.72
$2.88 $2.95 $3.03
$3.31
$2.20 $2.26 $2.33 $2.40 $2.48 $2.52
$2.60 $2.70
$2.79 $2.87
$2.96
$1.50
$1.70
$1.90
$2.10
$2.30
$2.50
$2.70
$2.90
$3.10
$3.30
$3.50
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Sacramento vs National Rent Growth
Sacramento Overall Sacramento Class A CBD US National Rent
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Sacramento Skyline
1325JStreet
One Capitol Mall Meridian Plaza The Senator Emerald Tower 12th K Tower Esquire Plaza Wells Fargo Center Bank ofthe WestTower Plaza Five Fifty Five US Bank
Tower 770 L Street Renaissance Tower Capitol Place 925 L Street Park Tower
Address 1325 J St. 1 Capitol Mall 1415 L St. 1121-1123 L St. 300 Capitol Mall 1201 K St. 1215 K St. 400 Capitol Mall 500 CapitolMall
555 Capitol Mall 621 CapitolMall
770 L Street 801 K St. 915 L St. 925 L St. 980 9th St.
RBA (s.f.) 363,723 185,950 229,109 180,123 383,238 241,996 270,712 511,184 445,984 385,178 366,337 170,267 337,811 163,840 165,919 463,556
Percent leased 97.3% 98.9% 93.3% 96.2% 93.4% 99.2% 97% 96.5% 95.1% 95.1% 96.8% 95.7% 94.5% 95% 93.8% 93.9%
Yearbuilt/ renovated 1989 1992 2003 1924/1982 1984/1996 1989 1999 1992 2009 1970 2008 1984 1989 1988 1973 1991
The Skyline market for Sacramento is defined as the Trophy market, which is further defined as a top-tier Class A product, larger than 100,000 square feet in a centralized core Sacramento CBD location. These Trophy assets tower above Sacramento’s metropolitan market and are considered the premier business addresses in our region. The key indicators for inclusion or exclusion are based on product type, location and rent levels.
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4.4 %Skyline Vacancy Rate
$3.63Direct average asking rent ($
p.s.f.)
Skylineanalysis
Occupied Direct vacant Future available
©2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. Jones Lang LaSalle Brokerage, Inc. Real Estate License #: 01856260
***All buildings under construction are state owned and occupied so they will not be reflected in our statistics as well as effect our skyline report.
1.6 MSF*Under construction
20
10
8
Aging Product and Supply Shortage
11
2
3
2
2
32
18
8
4
1
0 5 10 15 20 25 30 35
30,000 - 49,999
50,000 - 74,999
75,000 - 99,999
100,000 - 149,999
150,000 +
Number of Vacant Large Blocks –Greater Sacramento
Class B Large Blocks Class A Large Blocks
2
0
0
0
0
5
5
2
1
1
0 1 2 3 4 5 6
30,000 - 49,999
50,000 - 74,999
75,000 - 99,999
100,000 - 149,999
150,000 +
Number of Vacant Large Blocks –Downtown Sacramento
Class B Large Blocks Class A Large Blocks
©2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. Jones Lang LaSalle Brokerage, Inc. Real Estate License #: 01856260
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. 9
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Office Assets are Attracting out of Market Institutional Investors
$213 $171 $385
$187 $223
$618 $600
$1,240 $1,110 $1,145
$1,270
55
7287
98
115
160
135
205
171160
143
0
50
100
150
200
250
$100
$300
$500
$700
$900
$1,100
$1,300
$1,500
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Office Investment Over the Decade
Sales Volume Number of Transactions
Office investment volume has surpassed $1 billion for the fourth consecutive year.
©2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. Jones Lang LaSalle Brokerage, Inc. Real Estate License #: 01856260
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. 11
Sacramento Commercial Real Estate is EvolvingLocation & Tenant Experience
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What Want
Collaborative meeting areas
Onsitecafés
&retail
Outdoor gathering spaces
Break / gamerooms
Large, efficient
floorplates
Fitnessfacility
Natural light
Authenticity
Bike storage, showers
andlockers
Open, exposedceilings
Building conference
room
Central location / access to
transportation
Tenants
Renewal Options
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Trends to Watch
TechnologyCoworking
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Coworking total SF accounts for 1% of total inventory.
155,082 169,215 191,715224,337 239,784 259,784 287,484
336,535396,235
514,984550,000
646,146
10 1113
16 17
21
25
30
37
4649 50
0
10
20
30
40
50
60
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Co-Working Growth – Greater Sacramento
Total CoWorking SF Number of Locations
©2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. Jones Lang LaSalle Brokerage, Inc. Real Estate License #: 01856260
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