While the Sacramento commercial real estate market seems white-hot, with property flying off the shelf, most buyers of commercial properties (not to be confused with multifamily) are deliberate and sensible.
Recent sales in Midtown and Downtown certainly show that values are up, and the sales demonstrate that the Arena effect is more than hype, it is real. This being said, I think there is more to the story than meets the eye.
Long before the Arena, several larger projects were underway or far along in the planning stage. So while the Arena has stoked the fire, market dynamics were already at work to make Midtown and Downtown dynamic and thriving. The Arena just put gasoline on the fire. Properties that were not moving, have moved, and values have escalated significantly. Midtown was doing well in its own right, with the majority of new development happening there. But for Downtown, the Arena catapulted it exponentially.
Recent sales to go down in the Midtown and Downtown Markets include:
- 1234 H Street. A 2 story, 11,000 S.F. Office Building bought for $1,990,000 ($179 per S.F.) by a law firm (professionally represented by Tom Bacon) that will be occupying the top floor. The building has 22 parking spaces on site. The ground floor is available for lease at $1.75 a foot. The prior asking rent was $1.95 a foot.
- 2831 G Street. A 2 Story, 10,025 S.F. office building was bought by a user group for $1,925,000 ($191 per S.F.)
- 1001 G Street, 15,500 S.F. on three floors was bought by Tim Taylor for $2,880,000 ($180/S.F.) This building has more parking than most buildings downtown and has about 4,000 S.F. available.
- 1030 G Street is a 6400 S.F. building with covered parking that sold for $1,525,000 or $238 per S.F.
One thing that all the properties have in common: Great Parking; it just makes life easier.
A comprehensive Comp Study is available. Please contact Tom Bacon for your free copy, firstname.lastname@example.org.