801 K Street – arguably the most significant casualty from COVID
801 K Street, known as the Darth Vader Building or Renaissance Tower, is up for auction after falling out of contract with Ethan Conrad. 801 K Street was built in 1989; Wells Fargo Center at 400 Capitol Mall and Park Tower at 980 9th Street were built around that time. Downtown Sacramento was evolving. Currently, 801 K Street is about 62% vacant. 801 K Street went from 4% vacancy to 62% overnight when the Department of Conservation moved out. The California Earthquake Authority recently vacated 35,000 SF at 801 K and leased 10,000 SF at 400 Capitol Mall.
The minimum bid for the Darth Vader Building is $8,500,000. The current owner paid $80,000,000. The building will probably sell for $20,000,000 – $23,000,000 ($60-$68 a SF). This sounds like a steal, which it is, but not really. That’s just what it is worth. It will cost about $40,000,000 to fill the building back up, and it will probably take five years to get it leased. I have an idea – perhaps the State will buy Darth Vader’s ailing namesake.SBJ 801 K Article
Won’t the State Move back?
His
torically, we could count on the State backfilling the building, but no more. The State has vacated privately held office buildings and moved into buildings they built along P and O Streets and on Richards Boulevard. Wait until the State Department of General Services vacates the 400,000 SF Ziggurat building!
What is the real vacancy Downtown?
Costar states that Downtown’s overall vacancy factor is 8.7%. However, when you only consider Class A buildings over 150,000 SF, the vacancy factor is nearly 19%. This does not include space projected to go dark next year or the 250,000 SF available at 1515 S Street, one block from The Ice Blocks Development.
I still believe that Downtown Sacramento “will be back.” It has so many fantastic draws. And with the A’s coming to Sacramento, the whole country will get a good look at Downtown Sacramento when they Play Ball! Here is a great article by Marcos Breton of the Bee Goodbye and Hello A’s
If you want more detailed information about the market or you would like bid on 801 K, I would be honored to assist! Please get in touch with me at (916) 761-1202 or [email protected]