Two state agencies have signed leases at the same property in South Natomas, taking advantage of less expensive rates than are available in downtown Sacramento.
The state Department of Water Resources left midtown Sacramento for a 20,777-square¬foot lease of rentable space, and the Department of Consumer Affairs outgrew its space in North Natomas for a 26,455-square-foot lease of rentable space. Both are at Metro Center Corporate Park, at 2700 Gateway Oaks Drive in South Natomas.
Tony Whittaker, a senior vice president at CBRE Sacramento who worked on both leases, said South Natomas has absorbed 40,000 square feet of new office leases this year.
"Deals like these are indicators that sizable tenants know that large blocks of office
space are scarce," said Whittaker, who handles leasing for Metro Center with Rick Henry of CBRE, in an email. "Now is the time to secure them."
Rents are rising, but are still more affordable than in downtown Sacramento, and South Natomas also has free parking, new housing and amenities along the rivers as high points, he said.
Some credit for the leases also can go to GPR Ventures, which acquired the four-building, 267,894-square-foot Metro Square office complex for $36.8 million last October. Since the purchase, Whittaker said, GPR has begun upgrades on common areas and fitness centers, taken a more hands-on management approach and worked to negotiate more creative leases.
Occupancy at the time of purchase was 80 percent, Whittaker said; the new leases take it to 97 percent, after two smaller ones earlier this year.
"The state is still in expansion mode, and the office market is very strong," he said, adding existing properties benefit because there's no speculative office space currently under construction in South Natomas.
Currently, South Natomas has only three potentially available suites of more than 15,000 square feet, with current tenants possibly staying in two of them.Download PDF