| R E A L E STAT E |
Getting Real
About Real Estate
Five Sacramento-area commercial real
estate brokers weigh in on the strengths
and weaknesses of the region’s market
by JORDAN VENEMA
S
ince former Sacramento Mayor Kevin Johnson an-
nounced a 10,000-unit downtown housing initiative in
2015, it seems like all eyes have been on the state of
Sacramento’s residential real estate market. With the
steady increase of the home prices and rental rates between
2011 and 2018, Sacramento’s housing crisis was the talk of the
town. But in 2018, the regional commercial real estate market
quietly put up its strongest numbers in the last decade. By all
projections, that market should continue on a similar trajecto-
ry through 2019, although signs suggest there may be serious
hurdles in the future. To find out the strengths and weaknesses
of the CRE market in the Sacramento region, Comstock’s spoke
with five local brokers to discuss what’s happening in the mar-
ket now and what to expect in 2019 and beyond.
WHAT TRENDS CURRENTLY DEFINE THE SACRAMENTO MARKET?
According the Pew Research Center, since 2016, millennials
have made up the largest portion of the U.S. workforce. They
will continue to define the market with their preference for non-
traditional, green work spaces and a live-play-work lifestyle in
urban centers.
Alexis Garrett, vice president at JLL, a
property consultancy company, says that
has resulted in a suburban-to-urban shift
among her CRE tenants.
“Most of my clients are making this
decision for the purpose of providing their
employees with a more amenity-rich work environment,” she
says. “They see the benefits to being closer to [Downtown
Commons], Golden 1 Center and the surrounding new ame-
nities particularly to retain and recruit top talent and the new
generation of our workforce — that puts a high value on quality
of life and urban living.”
But the shift isn’t just in workforce, but
also work spaces. Nahz Anvary, senior vice
president at commercial real estate firm
Kidder Mathews, says, “I’m continuing to
see companies fit more people into less of-
fice space through various design changes
in office layouts and just simply allocating less space per em-
ployee. And coworking spaces like Urban Hive or Hacker Lab,
where individuals and small companies choose to work rather
than have their own office space, continue to have much draw
and appeal.”
Scott Bennett, senior vice president at
Colliers International, agrees. He sees the
potential to expand almost 600,000 ad-
ditional square feet of coworking space
across the market.
Garrett also predicts coworking spaces
will continue to grow. “Today, coworking and flexible space con-
sists of less than 1 percent of our total office inventory, but over
the next decade, I anticipate this percentage share to increase
tenfold,” she says.
Another trend, Anvary says, is greener buildings. “As it re-
lates to office properties, one trend over the past decade has
been toward more sustainability in office environments and
building materials, including LED lighting, efficient HVAC sys-
tems, better insulation and water conservation. Also, there is
a focus on landscape improvements through investments in
drought-tolerant landscaping and more efficient irrigation sys-
tems,” though it may be motivated by saving on operating costs
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