Sacramento Core Heating up Just in Time for Summer

Every couple months I run a sales comp report to see what has sold recently.  This time I looked up: land, multifamily, office and retail sales that closed in the last 6 months. I own a couple properties myself.  I wish I had bought my properties when I moved to Sacramento in 1991. 

Land sales are strong.  Multi-family sites in Midtown are running about $50 to $100 per square foot.  In some cases the prices are higher, but this is due to unusual circumstances, say a property is essential to a larger development or it is strategically located. 

Sacramento Midtown Multifamily

Existing apartments are trading at all-time highs.  In the Midtown and Downtown markets, the median is about $215,000 for apartments with more than 10 units.  Smaller properties, say fourplexes, sell for much higher prices per unit. 

The office market is also very strong with $200 per square foot as the new baseline.  The Senator Hotel sold for $47,000,000.  Just three years ago it sold for $32,000,000. 

The retail market segment in Midtown is solid with a few properties trading hands.  The Porch Restaurant sold for a reported $2,000,000, or $555 a foot.  On Broadway, the mixed use building at 21st and Broadway sold for $227 a foot, and the property needs work. 

If you have been thinking about selling, refinancing or just thinking – but not sure what to do – I would be happy to assist in any way. Additionally, if you have any questions on the properties or transactions referenced in this article, don’t hesitate to reach out to our office for more information. Have a great summer. In the meantime, please take a look at www.sacramentobacon.com

Who Needs a Broker?

With all the information on line, many tenants are searching for office space without a broker. Can you imagine? I Can.

I get calls from tenants that are frustrated. The office market data is often out of date and many leasing options are not visible without a subscription. Beyond the lack of good data, tenants complain about the amount of time required to sort through all the information. Once I talk with a tenant about the benefits of working with a knowledgeable broker, the tenant breathes a sigh of relief; particularly when they realize that they don’t have to pay the broker to assist with office needs.

Nothing is free, but hiring a broker is as close as it comes. A tenant representative gets paid by the landlord only when a deal is done, similar to how a residential agent gets paid when representing a buyer.

Another reason you hire a broker is because finding new space and negotiating a new lease or a renewal is complicated. Finding space is just the tip of the iceberg, and a when you work with an agent you save time because the agent knows what is actually available, and the agent knows which landlords are “reasonable” and those who are not.

Many office users (occupiers, tenants, owner users,) whether they lease or own, need guidance even when they don’t need to move. Over 50% of the clients I represent need to deal with their office needs years before the lease expires. Occupiers outgrow their space, so they need to sublease and move, or they need to expand and extend their lease. Some tenants need to consolidate. What happens when business slows down, and you need to cut your real estate costs? What is the best way to go? Well, a good commercial agent will help you evaluate all the options. Once you have weighed the options you can move forward – with a clear objective in mind. We are just finishing up a lease where the Tenant has nearly 5 years left on their existing- they anticipated that they would need about 50% more space a year from now, so we negotiated an extension and expansion that included a significant tenant improvement allowance. Had the tenant waited, they would have been reacting and they would have had much less leverage in negotiations.

Business leaders, Executive Directors, Partners, all the C level execs, are smart – and they have not gotten to where they are by accident. Success is a deliberate process; so is dealing with commercial real estate. It is no accident that most these smart business leaders hire a commercial agent. It just makes sense.

Tom Bacon, CCIM, has been assisting commercial real estate clients in Sacramento since 1991, with an emphasis in office properties and Occupier representation. Click on the link to subscribe and download the free Commercial Real Estate Leasing Guide.