Gallelli MARKET REPORTS
As of the close of Q3 2026, shopping center vacancy across the Sacramento region stood at 8.0% for the third consecutive quarter. Following a first quarter that recorded -177,000 square feet (SF) in space givebacks, the market has been back in growth mode. But the 119,000 SF of positive net absorption in Q2 and this quarter’s gains of 64,000 SF eradicated those early losses. Year-to-date, the market has absorbed just under 6,000 SF of space in total. Meanwhile, developers have added 207,000 SF of new product so far this year, the lion’s share of which has been leased quickly. As this report went to press, there was just 68,000 SF of space under construction, nearly all of which were additional pad buildings being developed at existing local shopping centers.
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As of the close of Q3 2024, overall shopping center vacancy in the Sacramento region stood at 7.6%, down slightly from the 7.8% rate of three months ago. One year ago, this metric stood at 7.9%. The market recorded positive net absorption of 96,000 square feet (SF) in Q3. Occupancy growth has remained in positive territory in two of the past three quarters, with the market having absorbed 221,000 SF of product year-to-date.
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As of the close of Q4 2023, overall shopping center vacancy in the Sacramento region stood at 7.9%. While this reflects a modest decline from the 8.0% vacancy rate of three months ago (Q3), this metric climbed over the course of 2023. One year ago, local vacancy stood at 7.5%. Yet, the trend has played out unevenly. Just five of the region’s 14 submarkets ended 2023 with increased vacancy levels.
Q4 Report Q3 Report Q2 Report Q1 Report2022 was another strong year for retail commercial real estate in the Sacramento region with an overall vacancy rate at 7.7% to close out the 4th quarter. With continued robust demand and nominal new construction, we have experienced positive net absorption and a relatively tight retail market. Despite Federal Reserve rate hikes, consumer spending in the region was still strong with retailers overall performing well in 2022.
Q4 Report Q3 Report Q2 Report Q1 ReportOffice vacancy ticked up slightly in Q3 2026. It now stands at 16.1%, up from last quarter’s reading of 15.9%. One year ago, local vacancy stood at 15.8%. Since that time vacancy has edged back and forth with demand levels best described as subdued, but stable. The market recorded -113,000 square feet (SF) of net absorption in Q3 (driven primarily by larger space givebacks in the Downtown, Roseville/Rocklin, and El Dorado submarkets). Occupancy growth has been in negative territory for two of the past three quarters. Year-to-date net absorption currently stands at -71,000 SF. But the lion’s share of these losses have come from Class B properties.
Q1 Report Q2 Report Q3 ReportAt the close of Q3 2024, office vacancy in the Sacramento market stood at 16.8%. This reflects an increase from the 16.4% rate recorded just three
months ago with the increase driven primarily by a few key large space givebacks from the region’s largest office tenant, the State of California.
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Since the first quarter of 2020 (when the pandemic spread across North America), the Sacramento office market has recorded positive net absorption in just three of 15 quarters. The first time this occurred was in Q3 2020, when the market recorded a modest 43,000 square feet (SF) of positive net absorption—largely due to space users occupying space from deals that largely had been in the works since before the Covid crisis outpacing the trend of space givebacks that, at the time, had only just begun.
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As of the close of Q4 2022, overall office vacancy in the Sacramento region stood at 14.9%. This reflects an increase from the 14.5% rate posted three months ago and the 13.9% level recorded one year ago. The market recorded 257,000 square feet (SF) of negative net absorption in Q4.
Q4 Report Q3 Report Q2 Report Q1 ReportAs of the close of Q3 2026, industrial vacancy in the Sacramento region stood at 7.2%, down from last quarter’s revised reading of 7.3%. After peaking at 7.5% in Q3 2025, vacancy has edged downward by 10 basis points in each consecutive quarter. Throughout the post-pandemic era and until this year, local industrial trends have mirrored national ones.
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At the end of 2025, industrial vacancy across the Sacramento market stood at 7.4%. This reflects a slight uptick from the 7.2% rate that was in place just three months ago, and a more substantial increase from the 6.5% rate of a year ago. Vacancy inched upward in three of four quarters in the past year, driven by both an increase in availability (both direct and sublease), and the impact of new
construction.
Industrial vacancy in the Sacramento region increased slightly from 6.1% to 6.2% in Q3 2024. The market recorded -176,000 SF in negative net absorption over the past three months. Deal activity (gross absorption) picked up slightly in Q3. We tracked just over 2.1 million square feet (MSF) in total transactions, up from 1.9 MSF in Q2. Despite this, a few major space givebacks in the Davis/Woodland submarket outpaced occupancy gains elsewhere to tilt the market into the red.
Q1 Report Q2 Report Q3 Report Q4 ReportAs of the close of Q4 2023, industrial vacancy in the Sacramento region stood at 5.9%. This reflects a substantial uptick from Q3’s recorded rate of 4.6%. Developers added more than 2.0 million square feet (MSF) of space in Q4,
making this one of the strongest quarters for new construction that the market has ever experienced (there are only four occasions in the past 25 years in which more than two million square feet of new product came online in a single quarter).
As of the close of Q4 2022, total industrial vacancy in the Sacramento region stood at just 4.0%. While this reflects a slight uptick from the 3.8% mark of three months ago and a more substantial increase over the 3.5% reading of Q4 2021, it still reflects an incredibly tight marketplace.
Q4 Report Q1 ReportThe multifamily market, both nationally and locally, has been on the same trajectory in recent years. Extremely tight availability coming out of the pandemic led to outsized rental rate growth (Sacramento year-over-year growth peaked at a whopping 10.5% in Q3 2021), a spike in investment activity, cap rate compression, and an aggressive wave of new development. Then vacancy increased as waves of new construction came online, eventually swinging the pendulum from under to near oversupply. Rental rate growth slowed, cap rates climbed, and investors largely shifted their focus to other commercial real estate types (primarily retail). But over the past year, the development pipeline has largely emptied. New construction is now back at more sustainable levels consistent with pre-pandemic norms and the market is moving towards better balance between supply and demand.
Q1 Report Q2 Report Q3 ReportAs of the end of Q3 2024, multifamily vacancy in the Sacramento region stood at 6.1%. This reflects a slight uptick from the 5.9% rate posted just three months ago. This increase in vacancy comes even though the market posted increased positive net absorption in Q3. Multifamily occupancy increased by 1,069 units in Q2, with occupancy growth increasing 17.5% to 1,257 units in Q3.
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Multifamily vacancy in the Sacramento region climbed over the final three months of 2023 to 6.7%, up from Q3 2023’s revised reading of 6.2%. One year ago, this metric stood at 5.9%, but vacancy increased in all but one quarter in 2023. Since reaching a local record low of 3.2% in Q2 2021, vacancy has inched up in eight of the last ten quarters. But as distressing as a three-year trend of increasing vacancy may sound to some, it is critical to note that typically multifamily vacancy
in the 5.0% to 7.0% range is considered healthy.
Apartment vacancy in the Sacramento market posted its sixth consecutive quarterly increase during the final three months of 2022, closing the year at 6.7%. Our data only tracks competitive multifamily projects with a minimum of 25 units and does not include smaller complexes or fourplexes, nor does it include senior, student, or Section 8 housing.
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