Sacramento nets two commercial deals

High employment leads to office space being leased.

Two major commercial real estate deals were recently inked in Sacramento, Calif., showing that the area's commercial market is starting to pick up steam.

"Compared to the last six years, it's mind-blowing," Jason Goff, managing director for commercial brokerage Jones Lang LaSalle, told The Sacramento Bee. "We're cautiously optimistic, but optimistic nonetheless."

Goodwill Industries, which has 165 independent community-based stores across the nation, paid $2.88 million for the building at 8001 Folsom Blvd., according to Sacramento Business Journal. Goodwill plans to use the 28,879-square-foot facility for its administrative headquarters. The building was previously owned in a joint venture.

The other major signing was a lease for 23,000 square feet in south Natomas, according to the Journal. St. Louis-based Centene Corp. is leasing the space and will begin occupancy as California Health and Wellness in December.

Chad Cook represented the seller in the Goodwill deal and helped present the lease in the Centene Corp. arrangement.

"It's a good sign for Sacramento when you've got owner-users coming in, taking advantage of low finance rates," Cook, an associate vice president with Cassidy Turley, told the Journal.

Cook stated that Goodwill will inhabit 60 to 75 percent of the building, with one ground-floor tenant leasing back its space.

"We've seen a strong pick up in activity in the last six to nine months," Cook said.

Sacramento market on the upswing
Sacramento has shown recovery in its total payroll employment from its low point years ago, which has given life to the office sector. In 2011, just 805,000 people were employed in the four-county Sacramento region, and now that number has gone up to 850,000, according to the state Employment Development Department, as cited by The Sacramento Bee.

"As the economy picks up, small businesses might be run from home offices, or businesses may expand within existing space until they reach capacity, at which time they will need to go out and search for more space," Suzanne O'Keefe, an economist at California State University, told The Bee. "Employers may be reluctant to sign a new lease for office space because of the long-term commitment typically required by landlords."

O'Keefe noted the improved conditions in the employment sector slowly seeps into more space being leased.

"But it takes some time," she said.

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