Business & Real Estate

Sacramento’s historic Hall of Justice building sold; may become apartments

Sacramento’s 97-year-old Hall of Justice building has been sold and might get converted to residential use.

The building, on the northern edge of downtown, is being purchased by a Sacramento real estate investment firm called Sutter Capital Group. “It’s a great asset; it’s got a lot of history,” said managing partner Burke Fathy.

Listed on the National Register of Historic Places, the four-story building on Sixth Street housed the Sacramento Police Department for nearly eight decades, until 1996. It was later used as a courthouse and for several years was home to the Sacramento County Public Law Library.

But it has fallen on hard times and is almost empty. The law library left several years ago and there’s only one tenant left, a law firm on the top floor. The previous owner, an unidentified Bay Area investor, lost the property to foreclosure last year, according to Fathy.

Fathy’s firm bought the building from the “special servicer,” a firm representing the lenders who took over the site. The deal is expected to close today.

Fathy said Sutter Capital is leaning toward converting the building from office space to high-end apartments. But he acknowledged that the building’s location next to the county jail could be a turn-off to prospective occupants, even though he said the presence of law enforcement in the vicinity makes the neighborhood safe.

“That’s definitely a negative from a residential perspective,” he said.

Another factor: Converting the site to residential use would likely cost a lot more than Sutter Capital spent buying the 47,000-square-foot building, he said.

He wouldn’t disclose the purchase price but said it’s “very much a fraction” of what the Bay Area investor paid. That investor bought the building for $14.3 million in 2006, when real estate prices were higher and the building was fully leased.

Editor's note: A story Friday on Page B1 on the sale of Sacramento's Hall of Justice building downtown misidentified of the purchaser. The company is Sutter Capital Group.