Need Office Space in Folsom?
The Folsom office market is about as healthy as you can get. The overall vacancy sits at 4.2%, which is below Folsom’s vacancy rate before the Pandemic. The Market consists of about 5,700,000 SF and only 36,000 SF of new office space has come on line in the last five years. So, while demand has been relatively ememic, rents are up 1.7% at $2.40 per SF.
According to CoStar analytics, by 2028 rents are projected to increase to $2.75 -$2.90 PSF.
North Vs South?
While there is no Civil War, The City of Folsom has an emerging market to the South of Highway 50. For now, the the North benefits from better proximity to established neighborhoods, retail and Corporate identity (Intel.) Folsom office space north of 50 is tight. If you are a user looking for 30,000 SF or more you have one option. Off of Blue Ravine – on Lake Natoma – 100 Blue Ravine is a two story office building that has been home to eRepublic for the last 25 years. The Building is for sale at only $168 per square foot. It is hard to believe it hasn’t sold yet, but prognosticators in the commercial real estate world think that the pandemic hangover is about over and more large users will begin to move forward with their post-Covid occupancy strategies. 100 Blue Ravine is being jointly marketed by Bacon CRE and JLL.
The City of Folsom annexed a significant swatch of land south of Highway 50 where significant residential and commercial development is underway. South of 50 we will see a significant increase in inventory, but most of that development will be build-to-suit rather that speculative development. And while there is not a lot of speculative development, as companies (Like Aerojet) shed excess space, there will be additions to the office inventory, primarily in R&D and Class B and C properties. Technically, Aerojet is in the City of Rancho Cordova – even though it falls into the Folsom Submarket. Presently Aerojet has a tad over 250,000 SF available for lease.
In addition to Aerojet, while not in Folsom, Blue Shield has a Campus in El Dorado Hills. They are selling their 250,000 SF campus – leasing back 150,000 SF of it. The buyer is marketing the leftover 100,000 SF which consists of two 50,000 SF buildings.
Office Sales in 2021 were Robust
In Folsom, office buildings sold for an average of $240 per square foot. The biggest sale was off of Parkshore Drive where Kingsbarn bought over 270,000 SF for an average sales price of $276 per square foot. This large purchase certainly skewed the numbers up, but even if you remove this sale, the average still exceeds $200 a SF.
Alternatives for Owner-Users in Folsom
Since there is only one viable option (100 Blue Ravine) for purchase in the Folsom area that is 30,000 to 50,000 SF, some users may end up taking a closer look at Rancho Cordova along the Highway 50 Corridor. Currently there are just a handful of buildings on the market for sale from 25K SF to about 60K. In El Dorado Hills, next to Town Center, JLL will be marketing two 50,000 SF buildings that are currently occupied by Blue Shield. Blue Shield is selling the 250,000 SF campus; they will remain in about 150,000 square feet.
What differentiates 100 Blue Ravine from the rest of the market is the fact that it is located on Lake Natoma, it is in the City of Folsom – and it is easily divisible for a smaller user plus the owner is willing to lease back some space as well.
For more information, please contact Tom Bacon at email@example.com or call (916) 761-1202.