801 K Street – arguably the most significant casualty from COVID

Ethan Conrad Properties acquired the 28-story Renaissance Tower at 801 K Street after placing the winning $21.4 million bid in a Ten-X auction. The final price represents 27% of its 2016 sale price of $80 million. The building totals 359,000 square feet with 500 structured parking spaces. The buyer was drawn to the tower’s steep discount, and on the surface, this seems like a fantastic deal – why not?  In addition to the price, the property had been significantly remodeled, and it’s just a matter of time before the state comes back and leases the property.

Along with 801 K Street, Ethan Conrad purchased 630 K Street and 770 L Street.   At the beginning of 2025, 801 K Street was approximately 40% leased. As of November 2025, the building was about 26% leased.  How have Ethan’s other downtown bets fared?  770 L Street was 37% vacant, and today, it sits at 23%.  As of the beginning of 2025, 630 K Street was approximately 75% vacant, and by Thanksgiving, the vacancy rate had decreased to 58%.

801 K Street was built in 1989; the Wells Fargo Center at 400 Capitol Mall and the Park Tower at 980 9th Street were also 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.  Several months ago, the California Earthquake Authority vacated 35,000 SF at 801 K and leased 10,000 SF at 400 Capitol Mall.

I had projected the building would sell for $20,000,000 to $23,000,000 ($60-$68 per SF), and as it turns out, we weren’t too far off.

Will the State move back?

Historically, 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 about 9%. However, when you only consider Class A buildings over 150,000 SF, the vacancy factor is nearly 21%. This does not include 250,000 SF available at 1515 S Street, one block from The Ice Blocks Development.  My money is on the State of California taking over the space at 1515 S Street.

If you want more detailed information about the market, I would be honored to assist!  Please get in touch with me at (916) 761-1202 or tom@baconcre.com