Leasing Activity
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Sacramento County Courts is in negotiation with David Taylor to lease 60,000 s.f. at 621 Capitol Mall, David Taylor’s latest downtown development scheduled for completion in summer of 2008. No terms have been revealed yet. The 360,000 s.f. building is reportedly now 60 percent pre-leased.
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The law firm of Orrick Harrington & Sutcliffe has stalled in the process of negotiating a move to the top two floors of 621 Capitol Mall. Orrick Harrington currently resides at 400 Capitol Mall and is now looking to possibly renew their existing lease.
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The California North State College of Pharmacy has completed a lease for 55,000 s.f. at 10811 International Drive in the Prospect Park area of Rancho Cordova. The college will initially take 27,000 s.f. on the entire first floor, March 1, 2008 and then will take the remaining 28,000 s.f. on the second floor in December of 2008. Although a complicated structure, rent starts at approximately $1.90 full service and then escalates $.05/s.f. annually.
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The Department of Social Services and the Department of Housing and Community Development signed a lease for a combined 50,000 s.f. at 1800 3rd Street, a Class B Downtown low rise.
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ABSO, a web-based human resource tools provider, subleased 30,735 s.f. from Agilent Technologies at 101 Creekside Court in Roseville.
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FFP Global has leased 16,500 s.f. for five years at 11093 Sun Center Drive in Rancho Cordova. The 31,000 s.f. building is now 100 percent leased.
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Synapsense, a provider of wireless solutions, signed a sublease for 14,220 s.f. for seven years at 2365 Iron point Road in Folsom.
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Communications Workers of America has leased 10,738 s.f. at 2804 Gateway Oaks Drive in South Natomas. The lease term is 10 years.
Building Sales
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555 Capitol Mall (376,000 s.f., Class A), a 16-story building in downtown Sacramento, is on the market for sale by the Palmer Team but the call for offers has been postponed. This building is scheduled to lose 160,000 s.f. of law firm tenants over the next 18 months. The current ownership is reportedly not interested in undertaking a new marketing strategy to absorb the upcoming vacant space. The building underwent a major common area, plaza, and façade remodel in 2004. The request for initial offers has been put on hold until first quarter of 2008.
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Parkway Corporate Plaza is on the market for sale in Roseville, California. This four-building project consists of 286,775 s.f. at 1620 – 1680 East Roseville Parkway. The request for initial offers has been put on hold until first quarter of 2008.
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100 Howe Avenue in the Campus Commons submarket is being marketed by DRA Advisors. The 130,000 s.f. building initially attracted several institutional buyers but recently fell out of contract.
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9750 Goethe Rd (88,000 s.f., Class C) just sold for $16 million ($182/s.f.) to a local investor. The building, located on Highway 50, was recently leased to State Dept. of Corrections.
Construction Activity
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The State of California had issued an RFP for a 700,000 - 1.4 million s.f. build-to-suit in or near the downtown submarket, however, the RFP was cancelled indefinitely due to uncertain economic conditions.
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Tsakopoulous Investments has recently completed foundation work at 500 Capitol Mall and steel construction has begun. The 440,000 s.f. building could be finished as early as the spring of 2009, adding to the large amount of Downtown Class A supply expected to come on line in the CBD between 2008 and 2009.
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Construction work continues on developer David Taylor’s 25-story, 365,000 s.f., Class A office building at 621 Capitol Mall in the heart of Downtown Sacramento. The building will be completed in summer of 2008 and is currently 60 percent pre-leased.
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Bannon Investors is planning a 12-story mid-rise office tower in South Natomas. The building has a future availability of 340,000 s.f. but construction will most likely not commence until a significant anchor tenant has been identified.
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Several new office projects are under construction in the Roseville/Rocklin submarket. Many of these building are available for sale for $240/s.f. on a cold shell basis. The vacancy rate for 2007 will end the year at 23 percent in Roseville/Rocklin as absorption has lagged new deliveries.
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