Downtown Sacramento investments on the rise with incoming housing, low vacancies

Investment activity in downtown Sacramento is on the rise, with low office vacancy rates and multiple housing developments in progress.

The Downtown Sacramento Partnership’s latest quarterly investment report shows Class A vacancy rates have dropped down to a five-year low of 4.7 percent.

Although there were only nine new housing units completed in the central city between April and the end of June, there are 1,082 units currently under construction and 274 of those are expected to be completed in the third quarter of 2019, according to the report.

The Downtown Sacramento Partnership extends to The Mill at Broadway, one of the biggest housing developments currently under construction. The Mill, located in nearby Upper Land Park, is expected to offer as many as 1,000 homes, but does not have an anticipated completion date.

Food-and-drink outlets still account for the largest share of downtown’s retail scene, at 34 percent, and seven new businesses opened in the last quarter, according to the report.

The recent sale of downtown’s Emerald Tower earlier this month for $127 million may have contributed to increased investor interest in the area.

The sale of 300 Capitol Mall was the biggest property sale downtown since the U.S. Bank Building was sold to Shorenstein Properties in early 2018 for $161 million, according to the Downtown Sacramento Partnership.

The Downtown Sacramento Partnership suggested that low vacancy rates, coupled with limited supply and growth in jobs and businesses are driving investor demand in the downtown area.

“We continue to see strong interest in downtown,” Downtown Sacramento Partnership executive director Michael Ault said in a prepared statement. “Investors, businesses and employees have transformed our urban core into a hub for innovation and culture.”