The commercial real estate markets in San Jose and Sacramento saw mixed performance in Q3 2024, with shifts in vacancy rates, rental prices, and sales metrics across retail, office, and industrial sectors. While San Jose experienced a slight rise in retail rents and steady industrial prices, the office sector saw increasing vacancy. In Sacramento, retail remained mostly stable, but the office and industrial sectors faced small increases in vacancy. Overall, the data highlights modest market changes as both regions continue to adjust to evolving economic conditions

San Jose Area – Regional Market Information

Retail

• Vacancy Rate: Slight uptick, rising to 4.58% from 4.41% in Q2.
• Rental Rates: Modest increase, moving from $3.34/sf/m to $3.37/sf/m.
• Capitalization Rates: Minimal change, edging up to 5.41% from 5.40%.
• Average Sale Price: Increased slightly from $494/sf to $496/sf.

Office

• Vacancy Rate: Increased to 15.83% from 15.35%.
• Rental Rates: Held steady at $4.67/sf/m.
• Capitalization Rates: Remained unchanged at 6.55%.
• Average Sale Price: Decreased from $532/sf to $530/sf.

Industrial

• Vacancy Rate: Slight rise to 7.58% from 7.55%.
• Rental Rates: Slight decline from $2.16/sf/m to $2.15/sf/m.
• Capitalization Rates: Stable at 6.09%.
• Average Sale Price: Held steady at $376/sf.

Sacramento Area – Regional Market Information

Retail

• Vacancy Rate: Slight decline to 5.8% from 5.9%.
• Rental Rates: Unchanged at $1.96/sf/m.
• Capitalization Rates: Increased marginally to 6.47% from 6.42%.
• Average Sale Price: Decreased from $248/sf to $246/sf.

Office

• Vacancy Rate: Rose to 11.16% from 10.99%.
• Rental Rates: Slight increase to $2.26/sf/m from $2.25/sf/m.
• Capitalization Rates: Slight rise to 9.06% from 8.98%.
• Average Sale Price: Dropped from $193/sf to $188/sf.

Industrial

• Vacancy Rate: Rose to 5.88% from 5.75%.
• Rental Rates: Held steady at $0.96/sf/m.
• Capitalization Rates: Nearly unchanged at 7.42%.
• Average Sale Price: Increased slightly from $150/sf to $151/sf.

Stay tuned for more updates as we continue to monitor these markets throughout the year!

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