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2022 Q2 Sacramento Industrial Market Report

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Resilient Market Fundamentals Spike Sales Volume

Sacramento’s industrial market is still on solid ground as tenant demand holds strong throughout the first half of 2022. The vacancy rate rose due to new speculative product hitting the market though rising construction costs and interest rates are starting to give some developers pause on starting new developments. Amazon’s pull back from the market has impacted a couple of future projects but overall tenant demand from expanding local occupiers is keeping pace with new supply. Market average warehouse/distribution asking rents hit another record-high this quarter as vacancy is 90 basis points below where it was two years ago. There are several large blocks of space at newly delivered projects that will be absorbed next quarter, placing downward pressure on vacancy. Robust quarterly sales volume revealed strong buyer demand and pricing continues to rise to record highs. The significant bump in interest rates will likely soften sales activity in the second half of the year, but there is still an enormous amount of capital allocated to industrial due to the sector’s resilient fundamentals and positive outlook. While the market will not match last year’s record pace of new supply and absorption, it will still achieve a stable 2022 with rising rents, low vacancy, and a manageable amount of supply.  

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2022 Q2 Sacramento Industrial Market Report

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Bob Shanahan

Research Manager

Sacramento

Bob entered commercial real estate at the start of 2015 at Colliers in Seattle/Bellevue and has more than seven years of commercial real estate research experience. A writer by nature, Bob is always trying to tell the story behind the numbers and go above and beyond to add value to his brokerage partners. Forever teachable and eternally curious, Bob strives to always be learning more while staying on the leading edge of market trends and remaining abreast of all pertinent real estate transactions and developments. Passionate about real estate and urban planning, Bob is dedicated to taking Colliers to the next level by providing market-leading thought leadership and trends analysis for his internal and external clients.. Bob is a natural-born storyteller, always digging into the statistics with unmatched nuance to craft a forward-looking narrative and outlook across the many sectors of commercial real estate he tracks.  

With extensive experience in office, industrial, multifamily, and retail research, and a developing competency in capital markets, life science, and healthcare/medical office, Bob assists brokers in the leasing and selling of property, providing best in class research support. He regulary provides market presentations for internal brokerage teams and external organizations. Bob focused primarily on the office and industrial markets in the Seattle/Puget Sound region from 2015-2017. From fall 2017 to early 2018, Bob was the office market research analyst at JLL in Sacramento with an emphasis on Downtown landlord-rep related research. 

Since May 2018, Bob has been back at Colliers in his hometown of Sacramento. Since mid-2018, Bob bas accelerated his career in the support of 40 brokers across the Capital City region. In late  2020, Bob was tasked with overseeing the Reno market while managing a new Research Analyst, and has taken on an increasing leadership role in the Northwest region, including leading the regional multifamily market report comprised of 10 markets from Northern California and Northern Nevada to Oregon and Washington. Bob has invested in his leadership development, recently completing the two year Management Development Program at Colliers in partnership with Harvard Business School and completing the year long Leadership Sacramento Class of 2021 through the Sacramento Metro Chamber Foundation.  

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