GREATER SACRAMENTO
Commercial real estate in the
Greater Sacramento region is shifting as the pandemic advances trends toward ecommerce , shaping new development opportunities for localized supply chains and increased inventory for streamlined distribution . Meanwhile , businesses grapple with new business models that could redefine the future of traditional office space .
Denton Kelley , managing principal of LDK Ventures , LLC , the firm that led the redevelopment of McClellan Park and is leading the development of The Railyards , sees the pandemic as a new variable that ’ s forced the industry to reevaluate office space . “ Office real estate in the Sacramento market , as with many regions , isn ’ t seeing much new transactional activity because we don ’ t know what tomorrow brings ,” he says . “ New lease transactions have decreased , with people not committing to 5- or 10-year leases and signing 1-year extensions to see how things unfold .”
However , Kelley notes industrial real estate is surfacing as the major beneficiary of pandemic-era trends . “ Ecommerce and last mile to consumer positioning , the demise of brick and mortar , and retail moving into the warehouse trends were already underway , but are now greatly accelerated ,” he says .
The pandemic exposed supply chain vulnerabilities — the inability to meet demand when entire industries , regions or countries were closed down — and spurred companies to build more inventory to avoid disruption . “ Those kinds of revelations aren ’ t quickly forgotten , so it creates more demand for warehouse ( space ) across all industrial markets ,” says Kelley . “ Vacancy is less than 5 percent for industrial and manufacturing in the Sacramento area . Essentially new development that ’ s occurring , speculative or otherwise , is being absorbed , so demand continues to outstrip supply for industrial real estate and I don ’ t see an end to it in the near term . Things have never been better in that sector .”
Commercial real estate in the City of Roseville is thriving as well , where construction has remained steady and development opportunities continue to grow . Recent new business openings in Roseville cover an array of sectors and include the furniture retailer Living Spaces , the medical manufacturer Penumbra , Restaurant Depot and soon an Amazon fulfillment center . Additionally , Laura Matteoli , economic development director for the City of Roseville , says the city is selling a number of properties for commercial development through requests for proposals .
City of Roseville Mayor John Allard attributes Roseville ’ s draw for development to several factors , including affordable utilities , a growing workforce and Roseville ’ s pro-business climate with fast , consistent , low-cost entitlement and permitting processes . Roseville ’ s
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28 comstocksmag . com | 2020