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2022 Q4 Sacramento Office Market Report

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Vacancy Rises to Nine-Year High as Demand Keeps Plummeting

Another challenging year for Sacramento’s office market is in the books. The region posted steeply negative net absorption for two consecutive quarters while annual net absorption was similar to 2021’s historically low level. The last two years have been the two lowest net absorption totals since 1998. Across the region and multiple industries, the remote work revolution appears to be winning out against the inconsistent return to office. Leasing activity from 2020 through 2022 is approximately 41 percent below the pre-pandemic average from 2017 to 2019. While office-using employment is now above pre-pandemic levels, it is not equating to an increase in office space demand. The State of California continues to vacate or downsize leased space, consolidating into new construction or owned offices, while private sector tenants are experimenting with what works best for its employees. The overarching consensus of hybrid work appears to be placing steady downward pressure on tenant demand, resulting in rising vacancy and availability, as well as diminished sales activity across the region. In 2023, we will likely see more of the same, however, a normalizing labor market and possible recession could upend the trajectory in either direction. 

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2022 Q4 Sacramento Office 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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