Sacramento Commercial Office Space for Rent

Q3 2026

Q3 2026 Sacramento Commercial Real Estate Market Report

Focus: Q3 2026 Market Trends

Executive Summary

Sacramento's commercial real estate market is steady, with office vacancy near 11%, industrial absorption turning positive, and retail navigating localized softness. Tenant demand on TenantBase moved decisively toward office in Q3: office space accounted for 66.7% of all Sacramento tenant searches, up from 14.8% in Q2 and 18.4% in Q1.

Sector Snapshot

  • Office: Stable. Direct vacancy was 11.1% in Q2 with positive absorption, and office became the dominant TenantBase search category in Q3.
  • Industrial: Steady. Direct vacancy held at 6.5% with positive year-to-date absorption.
  • Retail: Mixed. Availability rose to 7.0%, driven largely by one submarket, while suburban centers remained tight.
  • Multifamily: Balanced. Vacancy eased to 6.7% as the construction pipeline shrank by more than half.

Sacramento Tenant Demand Index

The TenantBase Tenant Demand Index tracks what businesses across the Sacramento region are actively searching for on the TenantBase platform each quarter. Because it measures tenant intent before leases are signed, it shows where demand is heading ahead of traditional vacancy and absorption data.

Q3 2026 Search Share by Space Type (July 1 to September 30, 2026)

  • Office: 66.7%
  • Retail/Storefront: 31.1%
  • Warehouse/Industrial: 2.2%

Three-Quarter Trend

  • Office: 18.4% in Q1, 14.8% in Q2, 66.7% in Q3
  • Retail/Storefront: 50.6% in Q1, 61.4% in Q2, 31.1% in Q3
  • Warehouse/Industrial: 31.0% in Q1, 25.4% in Q2, 2.2% in Q3

Key Takeaways

  • Office demand more than quadrupled quarter over quarter, from 14.8% to 66.7% of Sacramento searches, overtaking retail for the first time in 2026.
  • Office searchers want small, flexible space. 56.7% of office searches sought terms under one year, averaging 600 to 1,300 SF.
  • Retail tenants shifted sharply to short terms. Retail searches for terms under one year rose from 20.4% in Q2 to 61.5% in Q3.
  • Roseville and Rocklin led location interest, ahead of Downtown, South Sacramento, and Woodland/Davis.

Office Market

Sacramento office held steady through Q2 2026, the most recent quarter with published metro data, with modest positive absorption and limited new construction.

Key Metrics (Q2 2026)

  • Direct vacancy: 11.1%, down from 11.2% in Q1 (Kidder Mathews)
  • Net absorption: positive 48,520 SF in Q2 (Kidder Mathews)
  • Average asking rent: $2.14/SF per month full service, down 3.2% year over year (Kidder Mathews)
  • Submarkets: Downtown at 9.2% direct vacancy and $2.89/SF, Roseville/Rocklin at 9.5% and $2.19/SF, Folsom at 8.4% and $2.42/SF (Kidder Mathews)
  • Under construction: 92,000 SF for Dignity Health in Folsom and 38,350 SF at Riverpoint North in West Sacramento (Kidder Mathews)

TenantBase Office Activity

Demand share: 66.7% of Sacramento tenant searches, up from 14.8% in Q2 and 18.4% in Q1.

Lease term preferences:

  • Less than one year: 56.7%
  • 2 to 3 years: 20.0%
  • 3 to 5 years: 13.3%
  • 5+ years: 10.0%

Space requirements by term:

  • Less than one year: 600 to 1,300 SF
  • 2 to 3 years: 500 to 1,000 SF
  • 3+ years: 1,000 to 2,500 SF

Top locations: Roseville/Rocklin was the most requested area across all space types in Q3, followed by Downtown, South Sacramento, and Woodland/Davis. Many tenants searched broadly across Campus Commons, Carmichael/Fair Oaks, Folsom, and the Highway 50 corridor.

TenantBase data vs. the market: Sacramento office demand on TenantBase is almost entirely small users under 2,500 SF. Roseville/Rocklin, the most searched area, offers lower rents than Downtown at $2.19/SF versus $2.89/SF, which makes it a natural fit for cost-conscious small businesses. With metro rents down 3.2% year over year, small tenants have room to negotiate flexible terms across the region.

Industrial & Warehouse Market

Key Metrics (Q2 2026)

  • Direct vacancy: 6.5%, with total vacancy at 7.4% (Kidder Mathews)
  • Year-to-date net absorption: positive 137,118 SF, more than four times the first half of 2025 (Kidder Mathews)
  • Average asking rent: $0.79/SF per month NNN (Kidder Mathews)
  • Notable leases: Villara, 240,000 SF in McClellan, and Redwood Beverage Group, 236,716 SF in West Sacramento (Kidder Mathews)
  • Under construction: a 663,390 SF Costco warehouse in Natomas/Northgate, due 4Q 2027 (Kidder Mathews)

TenantBase Industrial Activity

Demand share: 2.2% of Sacramento tenant searches, down from 25.4% in Q2 and 31.0% in Q1.

TenantBase data vs. the market: Small industrial searches slowed in Q3 while large users drove absorption. With availability above 10% and rents slightly below a year ago, small industrial tenants have room to negotiate.

Retail Market

Key Metrics (Q2 2026)

  • Availability: 7.0%, up from 6.6% in Q1, driven mainly by Orangevale (CBRE)
  • Tightest submarkets: Folsom/El Dorado Hills at 3.0% and Laguna/Elk Grove at 3.2% (CBRE)
  • Average asking rent: $1.50/SF per month NNN, up from $1.47 a year earlier (CBRE)
  • Neighborhood, community, and strip centers: positive 185,000 SF of Q2 absorption (CBRE)

TenantBase Retail Activity

Demand share: 31.1% of Sacramento tenant searches, down from 61.4% in Q2 and 50.6% in Q1.

Lease term preferences:

  • Less than one year: 61.5%
  • 2 to 3 years: 15.4%
  • 5+ years: 15.4%
  • 3 to 5 years: 7.7%

Space requirements: Retail tenants seeking 5+ year terms averaged 1,000 to 2,500 SF.

TenantBase data vs. the market: Most Sacramento retail searches on TenantBase in Q3 were for short-term space. That aligns with a market where availability is rising in older corridors, giving operators flexible options, while grocery-anchored suburban centers in Folsom and Elk Grove stay tight. Tenants targeting those suburbs should expect competition and longer commitments.

Multifamily Market

  • Vacancy: 6.7% in Q2 2026, down from 6.8% in Q1 (Kidder Mathews)
  • Average asking rent: $1,806/unit, up 0.44% year over year (Kidder Mathews)
  • Under construction: 2,751 units, down 53.05% year over year (Kidder Mathews)

Q4 2026 Outlook

  • Office: Expect stable vacancy near 11%, with small-suite demand from TenantBase searches supporting leasing in Roseville/Rocklin and Downtown.
  • Industrial: Expect steady conditions as large users continue to absorb space.
  • Retail: Expect continued divergence between tight suburban centers and softer older corridors.
  • Multifamily: Expect gradual tightening as new construction slows sharply.

Frequently Asked Questions

What type of commercial space are Sacramento tenants searching for in 2026?

In Q3 2026, office space made up 66.7% of Sacramento tenant searches on TenantBase, followed by retail/storefront at 31.1% and warehouse/industrial at 2.2%. Office share rose from 14.8% in Q2.

Which Sacramento areas are tenants searching most?

Roseville/Rocklin was the most requested area on TenantBase in Q3 2026, followed by Downtown, South Sacramento, and Woodland/Davis.

What lease terms do Sacramento office tenants want?

56.7% of Sacramento office tenants on TenantBase sought terms under one year in Q3 2026, and 23.3% sought terms of 3 years or longer.

What is the office vacancy rate in Sacramento?

Sacramento office direct vacancy was 11.1% in Q2 2026, with an average asking rent of $2.14/SF per month full service, according to Kidder Mathews.

What is the industrial vacancy rate in Sacramento?

Sacramento industrial direct vacancy was 6.5% in Q2 2026, with asking rents of $0.79/SF per month NNN, according to Kidder Mathews.

How can I find commercial space in Sacramento at no cost?

TenantBase matches business tenants with vetted independent tenant rep brokers across the Sacramento region at no cost to the tenant. Brokers are compensated by the landlord. Get started with TenantBase.

Sources

  1. TenantBase proprietary search data, Sacramento, July 1 to September 30, 2026
  2. TenantBase, Sacramento Commercial Real Estate Market Report, Q2 2026
  3. TenantBase, Sacramento Commercial Real Estate Market Report, Q1 2026
  4. Kidder Mathews, Sacramento Office Market Report, Q2 2026
  5. Kidder Mathews, Sacramento Industrial Market Report, Q2 2026
  6. CBRE, Sacramento Retail Figures, Q2 2026
  7. Kidder Mathews, Sacramento Multifamily Market Report, Q2 2026

Disclaimer

Information in this report is aggregated from third-party sources and TenantBase proprietary platform data, and was synthesized with the assistance of AI. Market metrics reflect the most recent published data available at the time of writing. TenantBase search data reflects tenant activity on the TenantBase platform and is not a measure of total market leasing. All figures should be independently verified before making real estate decisions.