For the past few years, the office market has been under a microscope. Headlines highlight rising vacancy rates, shrinking occupancy, and companies reevaluating their long-term lease commitments. It’s easy to assume the sector is stalled. However, every market cycle has its leaders- properties that set the pace, challenge perceptions, and indicate where opportunity lies.

One such example could be 3900 Lennane Drive in Natomas, a building that recently sold for $6 million—a price more than 40% higher than the 2019 Sales price of $4,235,000.  The Sacramento Business Journal article, published August 12th, implied that this sale resulted in a nice gain for the Seller, but I think they might have come closer to breaking even.  

To realize a gain, what did it cost to get there? The simple, unconfirmed math tells me that the Seller might have eked out a modest return.  Why is this?  They probably spent over $1.5 million to renovate and re-tenant the building. Tenant Improvements alone could have reached $ 1.5 million.  Add Carry, Commissions, and Closing costs, and the “gain” approaches a break-even proposition – hopefully.   CBRE leased up the building and then sold it on behalf of the seller.  Here is a link to the article:  Sac Biz Journal Article

This isn’t just another transaction. It’s a case study in what happens when strategy, timing, and vision align.  It is also an illustration of what it takes to turn around an asset; you need to choose your hand carefully.  

From Half-Empty to Fully Leased

When GPR Ventures acquired 3900 Lennane in 2019 for $4.235 million, the building was just 50% occupied. Many saw risk. GPR saw potential. They made targeted improvements, repositioned the property, and attracted the right tenant mix.

Today, the 46,149-square-foot building is nearly 100% leased, with tenants including Golden Bay Mortgage Group, Exact Staff, and Refined Realty Group. The result? A stabilized, income-producing asset that commanded a premium price.

North Natomas: From “B-” Location to Emerging Submarket

For years, North Natomas carried the reputation of being a “B-” location, secondary to more established submarkets like South Natomas. But markets evolve. Over the past five years, North Natomas has experienced a surge in housing, retail, and amenities, reshaping the way tenants and investors perceive it.

In my own tours with clients evaluating space across South and North Natomas, I’ve seen a shift firsthand: more than half now give serious consideration to North Natomas. Convenience, new development, and quality amenities are changing the conversation.

Why This Sale Matters

This deal is more than a one-off success – it underscores important themes shaping Sacramento’s office market:

• Flight to Quality – Tenants gravitate toward well-located, functional, and modernized buildings.

• Occupancy Creates Value – Vacant buildings sell at discounts; stabilized assets command premiums. 3900 Lennane shows the power of executing a clear leasing and repositioning strategy.  The North Natomas office market has experienced a healthy increase in leasing velocity, driven by an enhanced offering of housing and retail.

• Market Shift Confirmed – Sacramento’s Office Market Is (has) Turned the Corner.

Takeaway for Investors and Owners

We’ve seen this cycle before: the buildings that lead recoveries are those that are thoughtfully renovated, aggressively leased, and correctly positioned. North Natomas is a testament to how quickly perceptions can shift. What was once overlooked is now producing stabilized assets that draw both tenants and investors.  The Sacramento office market isn’t stagnant – it’s recovering. And those who invest wisely today are setting themselves up for tomorrow’s gains.  But you need to choose wisely because the cost to turn around an office asset is expensive and it takes time.  If you aren’t careful, the ultimate gain could evaporate.  

If you own an office building and are considering how to reposition, lease up, or maximize its value, let’s talk. With over 40 years of experience in Sacramento commercial real estate, I help owners transform market perception into premium value.